SEBI’s Harmonized Amendments to REIT and InvIT Regulations

The Securities and Exchange Board of India (SEBI) vide gazette notification dated December 9, 2025, has introduced a set of harmonised amendments to the regulatory frameworks governing REITs and InvITs through the SEBI (Real Estate Investment Trusts) (Third Amendment) Regulations, 2025 and the SEBI (Infrastructure Investment Trusts) (Fourth Amendment) Regulations, 2025.

Since their introduction in 2014, REITs and InvITs have evolved into mature asset classes, attracting a diverse mix of domestic and foreign capital. However, over time, definitional ambiguities, particularly around institutional investors, qualified institutional buyers (QIBs), and strategic investors, have created interpretational gaps, both at the offer stage and during secondary market participation.

The latest amendments seek to address this concern by bringing uniformity to investor definitions across the regulatory frameworks governing such investment vehicles and aligning them with well-established capital market and disclosure norms, including SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 (ICDR) thereby ensuring consistency and regulatory coherence.

A key intervention under the REIT Regulations is the formal introduction of a standalone definition of “institutional investor.” Under the amended framework, an institutional investor now expressly includes:

• a qualified institutional buyer; or
• a family trust or SEBI-registered intermediary having a net worth of more than Rs. 500 crores, as per the latest audited financial statements.

The definition of Qualified Institutional Buyer has been aligned with the meaning assigned under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, ensuring consistency across capital market regulations. By anchoring the meaning of QIB to a single, well-established regulatory source, SEBI has eliminated the possibility of divergent interpretations across different market instruments.

The amendments also comprehensively rationalise the concept of a “Strategic Investor” under both regulations. Strategic investors may now include:

• Institutional investors;
• Foreign Portfolio Investors not otherwise classified as institutional investors;
• Reserve Bank of India–registered NBFCs in the middle, upper, or top layers; and
• Any other entities, as may be specified by SEBI from time to time.

To qualify as a strategic investor, the entity must invest either individually or jointly, not less than five percent of the total offer size, or such other threshold as SEBI may prescribe. All such investments remain subject to compliance with the Foreign Exchange Management Act, 1999 and the applicable foreign exchange framework.

Where an entity is regulated by another financial sector regulator, SEBI is required to consult the concerned regulator before recognizing such entity as a strategic investor, thereby reinforcing inter-regulatory coordination and introducing an important regulatory safeguard to mitigate systemic risk.

The harmonised amendments reflect SEBI’s broader objective of recalibrating the investor landscape for listed real asset platforms by ensuring definitional clarity, reducing regulatory asymmetry, and strengthening disclosure and governance standards. By aligning REIT and InvIT investor categories, SEBI has lowered structural friction for issuers accessing capital markets and enhanced predictability for institutional and strategic investors.