SEBI Plans to Relax Lock-In for Private-to-Public InvIT Conversion

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  • Last Updated on 3 July, 2025

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SEBI InvIT lock-in relaxation

Draft Circular; dated: 01.07.2025

The Securities and Exchange Board of India (SEBI) has proposed significant changes aimed at easing the conversion process of private listed Infrastructure Investment Trusts (InvITs) into public InvITs, thereby facilitating broader investor participation and enhancing regulatory clarity.

1. Proposed Removal of Lock-In Requirements

SEBI has proposed removal of lock-in restrictions in the following two cases upon conversion:

  1. Minimum Sponsor Contribution – The lock-in requirement currently applicable on the minimum sponsor contribution may be waived upon conversion into a public InvIT.
  2. Sponsor’s Units Over and Above Minimum Contribution – The lock-in on units held by the sponsor in excess of the minimum contribution may also be removed, further enhancing liquidity and flexibility for sponsors.

This move is expected to reduce entry barriers, provide sponsors with more operational freedom, and make the InvIT structure more attractive to institutional investors and fund managers.

2. Alignment with Follow-On Public Offer (FPO) Norms

In addition to the lock-in relaxation, SEBI has proposed that the procedure and disclosure requirements applicable to a follow-on public offer (FPO) will also be made applicable to the public offer of units during the conversion of a private InvIT to a public InvIT.

This ensures a uniform regulatory framework and aligns such conversions with established capital market practices, thereby enhancing transparency and investor confidence.

3. Public Consultation Open Until July 22, 2025

SEBI has invited public comments on these proposals. Stakeholders, including investors, sponsors, and market intermediaries, can submit their feedback by July 22, 2025.

4. Implications of the Proposal

If implemented, the proposals could:

  • Simplify the transition process for private InvITs seeking public listing
  • Encourage more private InvITs to opt for public market participation
  • Enhance investor protections through greater disclosure and standardised procedures
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