Kamal Ghorui
Market regulator Sebi has put forward proposals to widen the investment possibilities for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in liquid mutual fund schemes on Thursday.Currently, these trusts can only invest in liquid funds with the highest credit risk rating, limiting their options.These measures are part of Sebi’s push to make doing business easier for REITs and InvITs. “Sebi is examining changes to provide greater investment flexibility for REITs and InvITs while maintaining appropriate prudential safeguards,” the regulator said, as quoted by PTI.In the consultation document, Sebi suggested permitting InvITs to retain holdings in special purpose vehicles (SPVs) even after concession agreements end. The regulator noted that some SPVs may need to continue functioning to meet legal, contractual, tax, or litigation obligations.To support this, Sebi proposed revising the definition of SPVs with conditions such as a specified exit or reinvestment schedule and improved disclosure requirements at both InvIT and SPV levels.Additionally, the regulator recommended harmoising the rules for private InvITs with those that apply to public InvITs concerning greenfield projects. The changes will “facilitate privately listed InvITs to invest into pure greenfield projects up to 10 per cent of the value of the InvIT asset.”Sebi also proposed widening the use of fresh borrowings for InvITs when net debt exceeds 49 per cent of their assets.The regulator has asked stakeholders to provide feedback on these proposals by February 26.
