Mumbai, India – The Securities and Exchange Board of India (SEBI) is evaluating proposals to broaden the range of investment options for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), with the goal of enhancing market participation and capital inflows.

Expanding Liquid Mutual Fund Options

SEBI Chairperson Tuhin Kanta Pandey said in a speech on Friday that the regulator is examining proposals to expand the pool of liquid mutual fund schemes in which REITs and InvITs can invest. The initiative aims to increase liquidity and participation in these investment trusts while maintaining investor protections.

“We are examining a proposal to expand the pool of liquid mutual fund schemes, in which REITs and InvITs can invest, while safeguarding investor interests,” Pandey stated.

Inclusion of REITs in Market Indices

In addition to widening investment options, SEBI is also considering including REITs in market indices, which would provide greater visibility to these instruments and could attract additional investor interest.

Boosting Foreign and Institutional Investment

The move comes months after SEBI proposed allowing foreign investors and qualified institutional buyers to participate as strategic investors in REITs and InvITs. The aim is to enhance capital inflows into real estate and infrastructure sectors, which are critical components of India’s economic growth.

To facilitate these initiatives, SEBI is coordinating with other regulatory bodies, including:

• Insurance Regulatory and Development Authority of India (IRDAI)
• Pension Fund Regulatory and Development Authority (PFRDA)
• Employees’ Provident Fund Organisation (EPFO)

Greenfield Projects and Private InvITs

Pandey also mentioned that SEBI is exploring whether private InvITs could invest in greenfield infrastructure projects, provided adequate safeguards are in place to manage risk. This would potentially open up new investment avenues and further support India’s infrastructure development.

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Key Takeaways

• SEBI plans to expand liquid mutual fund options for REITs and InvITs.
• Inclusion in indices could boost visibility and attract investors.
• Foreign and institutional investors may be allowed to participate as strategic investors.
• Private InvITs could be allowed to invest in greenfield projects with safeguards.
• Coordinated efforts with IRDAI, PFRDA, and EPFO to enhance participation.