SEBI’s Enhanced Disclosure Regime for REITs and InvITs

In a move aimed at enhancing transparency and improving investor confidence, the Securities and Exchange Board of India (SEBI) has revised the financial disclosure and compliance norms applicable to Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These changes were announced via two separate circulars issued on vide May 7, 202,5 respectively (the “Circulars”) and are largely effective immediately, with certain provisions applicable from April 1, 2025. The Circulars have introduced amendments to Chapters 3 and 4 of the SEBI Master Circulars for REITs and InvITs dated May 15, 2024.

Driven by public consultation through SEBI discussion paper dated February 14, 2025, and report on ease of doing business by Working Group formed under the aegis of the Hybrid Securities and Advisory Committee (HySAC), the amendments mark a pivotal shift toward uniform, transparent, and investor-centric reporting practices.

Financial Disclosures in Offer Documents/Placement memorandum: Changes in Chapter 3 of the Master Direction

1. For Initial and Follow-on Offers: REITs and InvITs are now mandated to disclose audited financial statements for the last three financial years and a stub period, if applicable.
   1. If the latest audited financials are older than six months from the date of filing, stub period financials are mandatory.
   2. In follow-on offers, if the entity has been in existence for less than three years, financial disclosures must cover the entire period of existence along with any applicable stub period.
2. For Initial Offers Specifically:
   1. Offer documents must include audited combined financial statements of the REIT/InvIT.
   2. These statements must be audited by peer-reviewed auditors recognized under the REIT and InvIT regulations.
3. All statements must follow Indian Accounting Standards (Ind AS) and be presented in the format prescribed by Schedule III of the Companies Act, 2013 ensuring uniform layout and comparability.
4. Additional Financial Disclosures (Audited): REITs must now include the information relating to the following as a part of their financial disclosures:
   1. Project wise operating cash flows;
   2. A statement of contingent liabilities, commitments and capitalization;
   3. Information relating to related-party transactions;
   4. Debt payment history;
   5. A statement of net assets and total assets at fair value.
5. Additional Financial Disclosures (Audited): InvITs must disclose the following information in the financial statements:
   1. Balance Sheet
   2. Statement of profit and loss, changes in unit holder’s equity, cash flows;
   3. Explanatory notes annexed to, or forming part of, the above statements;
   4. Notes comprising material accounting policies and other explanatory information.

Continuous Disclosure and Compliance Requirements: Changes in Chapter 4 of the Master Direction

1. Timelines for Periodic Disclosures to Stock Exchanges
   1. Quarterly and Year-to-Date (YTD) Results to be submitted within 45 days from the end of each quarter (excluding Q4).
   2. Annual financial results must be submitted within 60 days from the end of the financial year.
   3. Fourth quarter results must reconcile the audited annual figures with previously reported cumulative numbers, accompanied by a note clarifying the figures.
2. Monitoring Utilization of Debt Proceeds: For REITs and InvITs that have issued debt securities under SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021, a statement of material deviations, if any, in the utilization of proceeds from listed debt securities is required to be submitted every quarter, alongside financial results.
3. Enhanced Unit Holding Pattern Disclosure: To strengthen investor visibility over ownership structures, REITs and InvITs must disclose unit holding patterns.
   1. One day prior to listing:
   2. Quarterly within 21 days from the end of each quarter; and
   3. Within 10 days of any capital restructuring exceeding 2% of the total outstanding units.

SEBI’s amended framework for REITs and InvITs represents a thoughtful blend of regulatory alignment, market modernization, and investor-focused reforms. By aligning REITs and InvITs disclosures with those of listed companies and SEBI’s ICDR framework, the regulator is actively eliminating regulatory arbitrage, promoting standardized investor disclosures, and enhancing trust in REITs and InvITs as mature financial instruments. These changes are likely to improve capital market access, attract long-term investors and reinforce India’s ambition to deepen its alternative investment ecosystem.