Overview
- SEBI’s board approved amending mutual fund rules to treat REITs as equity while keeping InvITs in the hybrid bucket for investments by mutual funds and Specialised Investment Funds.
- The regulator expanded who can qualify as a strategic investor in REIT and InvIT public issues to include QIBs, specified FPIs, pension and provident funds, insurance funds, AIFs, state industrial development corporations, family trusts, large registered intermediaries, and mid-to-top layer NBFCs.
- SEBI said REITs exhibit equity-like characteristics and relatively higher liquidity, whereas InvITs are largely privately placed with steadier cash flows and lower liquidity, supporting the differing classifications.
- With REITs counted within equity allocations, market participants point to improved prospects for equity index inclusion and broader mutual fund participation, a move welcomed by the Indian REITs Association and issuers such as Embassy REIT.
- Coverage notes that the existing joint investment limit previously shared by REITs and InvITs will now apply only to InvITs, with formal amendment text and implementation timelines to follow.