SEBI approves equity status for REITs to broaden investor participation; Indian REITs Association welcomes move
The board of Securities and Exchange Board of India has cleared the classification of Real Estate Investment Trusts as equity to broaden investor participation
The board of the Securities and Exchange Board of India (SEBI) has approved the classification of Real Estate Investment Trusts (REITs) as ‘equity’ and retained the ‘hybrid’ classification for InvITs (Infrastructure Investment Trusts) for the purpose of investments by mutual funds and Specialised Investment Funds.
"The Board approved the amendments to SEBI (Mutual Funds) Regulations, 1996 for inter-alia re-classifying REITs as ‘equity’ and retaining the ‘hybrid’ classification for the InvITs, for the purpose of investments by Mutual Funds and Specialized Investment Funds," SEBI said in a statement.
Sebi said its board approved the proposal of amending InvIT/REIT norms to widen the investor base for applying under the strategic investor category in a public issue of such trusts.
"The re-classification was proposed, inter-alia considering the characteristics of REITs i.e., being more inclined towards equity, relatively more liquid, and to ensure alignment with global practices. InvITs, on the other hand being products primarily privately placed with more stable cash flows and having lesser liquidity, the hybrid classification was proposed to be retained," it added.
"This will promote ease of doing business by enabling InvITs/REITs to attract capital from more investors under the Strategic Investor category," Sebi said.
{{/usCountry}}"This will promote ease of doing business by enabling InvITs/REITs to attract capital from more investors under the Strategic Investor category," Sebi said.
{{/usCountry}}Earlier, REITs and InvITs were categorised as hybrid funds because they blend characteristics of both equity and debt investments, and offer a unique combination of income generation and potential capital appreciation.
{{/usCountry}}Earlier, REITs and InvITs were categorised as hybrid funds because they blend characteristics of both equity and debt investments, and offer a unique combination of income generation and potential capital appreciation.
{{/usCountry}}REITs are investment vehicles that own, operate and manage a portfolio of income-generating properties for regular returns. Small investors can buy units of REITs from both primary and secondary markets just as they buy shares or mutual funds.
Indian REITs Association welcomes move
{{/usCountry}}REITs are investment vehicles that own, operate and manage a portfolio of income-generating properties for regular returns. Small investors can buy units of REITs from both primary and secondary markets just as they buy shares or mutual funds.
Indian REITs Association welcomes move
{{/usCountry}}The Indian REITs Association (IRA) has welcomed SEBI’s progressive move to classify Real Estate Investment Trusts (REITs) as equity for the purpose of inclusion in market indices.
{{/usCountry}}The Indian REITs Association (IRA) has welcomed SEBI’s progressive move to classify Real Estate Investment Trusts (REITs) as equity for the purpose of inclusion in market indices.
{{/usCountry}}“This important step marks a significant milestone in strengthening the REIT ecosystem in India and aligns with global best practices where REITs are part of equity indices. This decision is a step forward that will contribute to enhancing the depth of the REIT market and accelerating the growth of these instruments in India. By enabling this, SEBI has paved the way for widening investor participation in these instruments and also improving liquidity,” it said.
Similar to the reduction in lot size, which SEBI enabled in July 2021, this reform shall also help foster greater market participation and position India as a progressive investment destination for institutional investment in yielding assets, it said.
IRA also welcomes SEBI’s move to expand the scope of “strategic investor” for Real Estate Investment Trusts (REITs) to facilitate wider investor participation.
Amit Shetty, CEO of Embassy REIT said “at Embassy REIT, we see this as a catalyst to broaden investor participation, enhance liquidity, enable future index inclusion, and further strengthen REITs as a mainstream investment asset class.”
A report released by Credai and Anarock at the CREDAI Natcon 2025 in Singapore said on September 12 that the REIT market in India has grown steadily since its first listing in 2019, reaching a market capitalization of about $18 billion as of August 2025. With three more REITs expected over the next few years, India is projected to surpass $25 billion in market capitalization by 2030.
