Aligning with global norms, SEBI opens new doors for REIT investors.

SEBI Confers Equity Status on REITs, Seeks to Enhance Investor Participation.                                                                                                                                                      

The Securities and Exchange Board of India (SEBI) has approved the reclassification of Real Estate Investment Trusts (REITs) as ‘equity,’ a move expected to broaden investor participation and enhance market depth. The decision aligns Indian regulations with global practices, recognising REITs as equity-like instruments due to their liquidity and market-driven nature. Under the revised framework, REITs will now be considered equity for investment purposes by mutual funds and specialised investment funds, while Infrastructure Investment Trusts (InvITs) will continue to be treated as ‘hybrid’ instruments, given their stable cash flows and relatively lower liquidity. Additionally, SEBI’s board cleared amendments to widen the investor base eligible to apply under the ‘strategic investor’ category in public issues of REITs and InvITs. Industry representatives, including the Indian REITs Association, welcomed the move, calling it a step towards deepening capital markets and attracting diverse investor participation in India’s real estate sector.