SEBI Proposes Easier InvIT Rules on SPVs and Greenfield Projects

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  • Last Updated on 8 February, 2026

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SEBI InvIT easing rules

SEBI Consultation Paper Dated 05.02.2026

The Securities and Exchange Board of India (SEBI) has issued a consultation paper proposing a series of ease-of-doing-business (EoDB) measures for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

The proposals aim to provide greater operational flexibility, improve capital efficiency, and support long-term infrastructure and real estate development while maintaining investor protection.

1. Retention of SPVs by InvITs After Concession Expiry

SEBI has proposed allowing InvITs to retain Special Purpose Vehicles (SPVs) even after the expiry of concession agreements, subject to:

  • Adequate disclosures to investors
  • A time-bound exit mechanism for such SPVs

This proposal seeks to address practical challenges faced during concession closures and facilitate orderly exits without disrupting trust operations.

2. Expanded Investment in Liquid Mutual Funds

It has been proposed to:

  • Allow REITs and InvITs to expand their investments in liquid mutual fund schemes
  • Subject to the condition that such schemes have a Credit Risk Value (CRV) of 10 or higher

This measure is intended to enhance treasury management flexibility while ensuring prudent risk standards.

3. Investment by Private InvITs in Greenfield Projects

SEBI has proposed permitting private InvITs to:

  • Invest up to 10% of their asset value in greenfield infrastructure projects

This change aims to:

  • Encourage early-stage infrastructure development
  • Enable capital formation in new projects while limiting exposure to developmental risks

4. Widening the Permissible Use of Higher Borrowings

Under the current framework, borrowings beyond 49% of asset value are subject to strict end-use restrictions. SEBI has proposed to widen the permissible use of such borrowings to include:

  • Refinancing of existing debt
  • Capital expenditure (capex)
  • Capacity augmentation
  • Major maintenance expenditure, including for road assets

This proposal is expected to improve financial flexibility and asset sustainability for InvITs and REITs.

5. Objective of the Proposals

The consultation paper seeks to:

  • Reduce operational and regulatory friction
  • Align regulatory norms with market realities
  • Strengthen the REIT and InvIT ecosystem
  • Support infrastructure growth while safeguarding investor interests

6. Invitation for Public Comments

Considering the potential impact on trusts, sponsors, investment managers, lenders, and investors, SEBI has invited public comments and suggestions on the proposed measures.

Stakeholder feedback will be taken into account before finalising the regulatory framework.

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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