SEBI’s Bold Move to Widen Strategic Investor Criteria

In a significant move to attract more institutional capital, the Securities and Exchange Board of India (SEBI) has proposed to broaden the definition of 'strategic investor' under the REIT and InvIT norms. The proposed changes aim to include Qualified Institutional Buyers (QIBs) and specific categories of foreign portfolio investors (FPIs).

SEBI's consultation paper highlighted that the present definition excludes significant institutional investors like pension funds, provident funds, and insurance funds, despite their active participation due to a preference for stable income-generating assets. SEBI suggests amending this definition to allow entities classified as QIBs under ICDR regulations to qualify as strategic investors.

This move would open doors for a broader spectrum of institutions, including public financial entities, pension and provident funds with substantial corpus, and insurance funds managed by the armed forces or postal department. However, SEBI intends to maintain restrictions on FPIs such as individuals, corporate bodies, or family offices not falling under strategic investors. Public comments are invited until August 22, ensuring transparency in moving forward.

(With inputs from agencies.)