Sebi Reforms Simplify Investment Landscape for InvITs and REITs

The Securities and Exchange Board of India (Sebi) has implemented new rules, effectively reducing the minimum allotment lot for privately placed Infrastructure Investment Trusts (InvITs) in primary markets to Rs 25 lakh. This change aligns the primary market rules with those of the secondary market, where the trading lot size has already been capped at Rs 25 lakh.

Previously, minimum allotment in the primary market ranged significantly, requiring investors to commit either Rs 1 crore or Rs 25 crore based on asset mixes. This alignment brings uniformity across both markets. Additionally, Sebi has amended regulations to further streamline processes for both InvITs and Real Estate Investment Trusts (REITs), enhancing business operations within these sectors.

Among key amendments is the classification of related parties of REITs and InvITs, distinguishing them from public categories unless categorized as Qualified Institutional Buyers (QIBs). This distinction provides a clearer market structure. Further updates include changes that allow holding companies to address negative cash flows before distributing funds to trusts, improving financial flexibility. The board also mandates synchronized timelines for the submission of crucial financial reports, harmonizing them with financial results submissions.