SEBIs Revises Framework for Conversion of Private Listed InvITs into Public InvITs

The Securities and Exchange Board of India (SEBI) has, vide circular bearing reference no. SEBI/HO/DDHS/DDHS-PoD-2/P/CIR/2025/114 dated August 8, 2025, introduced key changes to the regulatory framework for converting private listed Infrastructure Investment Trusts (InvITs) into public InvITs, which are effective immediately.

These amendments revise Chapter 14 of the Master Circular for InvITs dated May 15, 2024, the “Master Circular”), aiming to streamline compliance, harmonize disclosure requirements, and simplify the conversion process. 

Privately listed InvITs have been increasingly exploring conversion into public InvITs to access broader capital markets and improve liquidity. However, stakeholders highlighted certain procedural bottlenecks and inconsistencies in the existing framework. Acting on these suggestions and the recommendations of the Hybrid Securities Advisory Committee (HySAC), SEBI has now revised the regulatory provisions to ensure clarity, consistency, and smoother transition from private to public structures.

Key Changes Introduced

1. Alignment of Sponsor Holdings and Lock-In Periods

• • Sponsors and their group entities must comply with the minimum unitholding requirements under Regulations 12(3) and 12(3A) of the InvIT Regulations.
  • Lock-in periods for sponsor units will now align with Regulation 12(5), ensuring consistency across all stages of InvIT operations.

2. Public Issuance Norms Updated

• • Public issuance of units during the conversion process has changed from initial public offer (IPO) norms to follow-on offer (FPO) norms.
  • References in the Master Circular (Paragraphs 14.3.1, 14.8.1, 14.9.1, and 14.9.1(a)) updated to terms such as “follow-on”, “such public issue”, and “Details of distributions made by the InvIT”.
  • Disclosure and procedural requirements for public issuance are now fully aligned with FPO norms, reducing procedural complexity.

SEBI has directed recognised stock exchanges and the Bharat InvITs Association to publish the updated norms on their websites for wider awareness.

Implications for Stakeholders

• Sponsors and Managers: Must maintain minimum unitholding and lock-in in accordance with the revised regulations and follow updated FPO procedures.
• Investors: Benefit from consistent disclosures and clearer, harmonized processes.
• Market Development: Aligning conversion norms with the InvIT regulations removes ambiguity and supports the institutional growth of InvITs in India.

SEBI’s updated circular represents a significant step toward simplifying and standardizing the conversion of private InvITs into public InvITs. By linking sponsor unitholding and lock-in norms directly to regulations and aligning public issuance with follow-on offer requirements, the amendments reduce compliance burden, enhance transparency, and support the development of India’s infrastructure investment market.