The Securities and Exchange Board of India (Sebi) has eased access to Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) by reducing the minimum investment threshold in the primary market to Rs25 lakh.
Starting September, investors can participate in privately placed InvITs with Rs25 lakh, compared with the earlier steep thresholds of Rs1 crore or even Rs25 crore depending on the asset mix. This brings the primary market in line with the secondary market, where the minimum lot size was already Rs25 lakh.
Sebi notified rules on Tuesday to reduce the minimum allotment lot in the primary market for privately placed infrastructure investment trusts (InvITs).
For affluent individuals and family offices looking to diversify beyond stocks, bonds, or mutual funds, this reform opens the door to infrastructure-backed income streams. InvITs typically distribute stable cash flows generated by toll roads, power projects, or telecom towers, while REITs offer exposure to commercial real estate like office parks and malls.
By reducing the barrier to entry, Sebi is making these asset classes more accessible to investors who earlier found the upfront commitment too high.
Sebi has also clarified the classification of “public” unitholders in REITs and InvITs. Under the new rules, units held by related parties of the sponsor, investment manager, or project manager will not be counted as “public” — unless such entities are Qualified Institutional Buyers (QIBs), in which case they will be included.
This widens the pool of units qualifying as public shareholding.
In another relief, Sebi has allowed holding companies (holdcos) to offset their own negative cash flows against inflows from underlying special purpose vehicles (SPVs) before distributing funds to InvITs/REITs, provided adequate disclosures are made.
Earlier, holdcos were required to distribute 100% of cash received from SPVs, irrespective of their own balance sheets.
To improve transparency, Sebi has also aligned the timelines for quarterly, valuation, and financial reporting, eliminating the earlier mismatch.
Additionally, the regulator has simplified the format for portfolio manager disclosure documents, which now must be shared with clients along with a certificate in Form C before signing agreements.
