SEBI Revises Investor Definitions under InvIT and REIT Regulations

Notification No. No. SEBI/LAD-NRO/GN/2025/287, Dated 09.12.2025

1. Overview

SEBI has notified amendments to both the Infrastructure Investment Trusts (InvIT) Regulations, 2014 and the Real Estate Investment Trusts (REIT) Regulations, 2014, revising key investor classifications to ensure greater consistency, transparency, and suitability standards across investment vehicles.

2. Amendments to InvIT Regulations, 2014

2.1 Revised Definition of “Institutional Investor”

The earlier definition of institutional investor has been substituted. Under the amended framework, an Institutional Investor now includes only:

• A family trust, or
• A SEBI-registered intermediary
• Having a net worth exceeding ₹500 crore

This significantly narrows the eligible category, focusing on high-capacity, sophisticated investors, ensuring that only entities with appropriate financial strength participate at the institutional level.

2.2 Substitution of “Qualified Institutional Buyer” (QIB)

The definition of QIB has been revised to align with updated market classifications and ensure uniformity with other SEBI regulations.

This helps standardise eligibility across capital market products and strengthens suitability norms for participation in InvIT issuances.

2.3 Updated Definition of “Strategic Investor”

The definition of Strategic Investor has also been substituted.
Strategic investors typically include:

• Sovereign wealth funds
• Pension funds
• Insurance companies
• Other long-term capital providers

The revised definition aims to:

• Bring clarity on eligibility criteria
• Strengthen governance around cornerstone or anchor investments
• Ensure long-term stability in InvIT ownership structures

3. Amendments to REIT Regulations, 2014

3.1 Introduction of a Definition for “Institutional Investor”

A new definition of institutional investor has been inserted into the REIT Regulations, bringing the REIT framework in line with the revised InvIT norms.

This harmonisation promotes consistency across infrastructure and real-estate investment products.

3.2 Substitution of Related Investor Definitions

Similar to InvIT amendments, the REIT Regulations now contain:

• A revised definition of Qualified Institutional Buyer (QIB)
• A revised definition of Strategic Investor

These changes aim to:

• Provide alignment of investor categories across SEBI’s regulatory ecosystem
• Ensure that investor classifications reflect evolving market sophistication
• Strengthen the regulatory architecture for raising and deploying capital in REITs

4. Regulatory Intent

The amendments collectively seek to:

• Enhance investor quality and suitability for InvITs and REITs
• Promote stability and long-term investment orientation
• Align investor definitions with current market structures and capital depth
• Improve governance and oversight around cornerstone participation
• Ensure harmonisation across SEBI’s alternative fund, listing, and institutional investor frameworks

5. Implications for Market Participants

5.1 For Sponsors and Managers

• Need to reassess investor eligibility when planning issuances
• Updated offering documents and disclosures are required
• Strategic and cornerstone investment arrangements must comply with new definitions

5.2 For Investors

• Higher entry requirements for institutional classification
• Clearer investor categorisation improves risk–return matching

5.3 For Intermediaries

• Must update internal compliance protocols and onboarding standards
• Disclosure templates and marketing materials need alignment with revised definitions

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