SEBI Allows InvIT Borrowings Above 49% for Specified Purposes

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  • Last Updated on 19 May, 2026

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InvIT borrowings

Circular No. SEBI/HO/DDHS/DDHS-PoD-2/ I/11700/2026, Dated 15.05.2026

The Securities and Exchange Board of India (SEBI) has issued a circular clarifying the permissible utilisation of fresh borrowings where the net borrowings of an Infrastructure Investment Trust (InvIT) exceed forty-nine percent of the value of InvIT assets under Regulation 20(3)(b)(ii) of the SEBI (Infrastructure Investment Trusts) Regulations, 2014.

The clarification aims to provide regulatory certainty regarding deployment of additional borrowings by highly leveraged InvITs.

1. Applicability of the Clarification

The circular applies in cases where the net borrowings of an InvIT exceed 49% of the value of its assets, which is subject to conditions prescribed under the InvIT Regulations.

SEBI has clarified the purposes for which fresh borrowings may be utilised in such situations.

2. Permitted Use of Fresh Borrowings

SEBI has permitted utilisation of fresh borrowings for the following specified purposes:

2.1 Capital Expenditure for Asset Enhancement

Borrowings may be used towards capital expenditure incurred for:

  • Enhancement of asset performance; or
  • Capacity augmentation of infrastructure assets

The clarification is intended to support operational improvement and efficiency enhancement of existing infrastructure projects.

2.2 Major Maintenance Expenditure for Road Projects

The circular also permits utilisation of borrowings towards major maintenance expenditure relating to road projects.

SEBI has clarified that “major maintenance expenditure” shall mean:

Non-routine maintenance expenditure undertaken in accordance with obligations specified under the concession agreement.

This clarification seeks to distinguish major maintenance from routine operational expenses.

2.3 Refinancing of Existing Debt

Fresh borrowings may also be utilised for refinancing existing debt subject to specified conditions.

3. Conditions for Refinancing

SEBI has prescribed the following conditions for refinancing of debt:

  • The original debt being refinanced must have been utilised for purposes permitted under the InvIT Regulations; and
  • Only the principal amount of such debt may be refinanced.

The circular specifically clarifies that refinancing shall not include:

  • Accumulated interest
  • Fees
  • Other charges associated with the original borrowing

4. Objective of the Circular

The clarification aims to facilitate efficient capital management by InvITs while ensuring that additional borrowings are utilised only for productive infrastructure-related purposes.

The circular also seeks to balance operational flexibility for infrastructure projects with prudent leverage management and investor protection under the InvIT regulatory framework.

Click Here To Read The Full Circular

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied