NEW DELHI: On Thursday, the market regulator Sebi proposed to broaden the investment scope for liquid mutual fund schemes by Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), as the current eligibility criteria limit their investment choices.
At present, these investments are confined to liquid schemes that have a high credit risk value and are highly classified in terms of risk.
Sebi’s proposals aim to simplify business operations for REITs and InvITs, offering enhanced investment flexibility while maintaining necessary prudential safeguards.
In its consultation paper, Sebi has also suggested that InvITs should be allowed to retain investments in special purpose vehicles (SPVs) even after the termination of concession agreements, recognizing their need to remain operational for compliance with legal, contractual, tax, or litigation-related duties.
To support this, Sebi proposed revising the SPV definition, including conditions such as setting an exit or reinvestment timeline and ensuring greater transparency at the InvIT and SPV levels.
Moreover, Sebi has suggested aligning investment conditions for private InvITs with those of public InvITs concerning greenfield projects. The amendment would enable privately listed InvITs to invest in pure greenfield projects up to 10% of their asset value.
Additionally, Sebi has proposed increasing the allowable use of new borrowings by InvITs to exceed 49% of asset value.
The regulator is seeking public feedback on these proposals until February 26.
