SEBI Board Approves Depository Receipts Route for Publicly Listed REITs and InvITs to Tap Global Capital — September 24, 2026

In a major capital market reform aimed at deepening offshore liquidity for domestic yield instruments, the Securities and Exchange Board of India (SEBI) has approved a regulatory framework permitting Real Estate Investment Trusts (REITs) and publicly listed Infrastructure Investment Trusts (InvITs) to issue Depository Receipts (DRs) on global exchanges.

The decision eliminates a long-standing operational disconnect. While units of REITs and InvITs were already categorized as eligible securities under the central government's Depository Receipts Scheme, 2014, and permitted under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019, the market regulator's specific trust regulations lacked enabling provisions to facilitate issuances.

The board's clearance formalizes amendments to both the SEBI (Real Estate Investment Trusts) Regulations, 2014, and the SEBI (Infrastructure Investment Trusts) Regulations, 2014, bridging this regulatory gap.

Structure of the Framework

Under the approved structure, which aligns with recommendations submitted by SEBI's Hybrid Securities Advisory Committee (HySAC) and mirrors India's existing equity DR framework, eligible trusts will be allowed to issue foreign currency-denominated receipts against underlying domestic units deposited with a custodian in India.

Key components of the approved DR mechanism include:

• Dual Issuance Channels: The mechanism enables fresh capital raising through the creation of new units overseas, alongside secondary liquidity through the transfer of existing units by sponsors or unitholders to foreign depositories.
• Public Vehicle Focus: The permission is restricted to REITs and publicly listed InvITs. Privately placed or privately listed InvITs remain excluded due to their institutional nature and mandatory minimum trading lot sizes.
• Jurisdictional and Ownership Safeguards: Issuances will be confined to permissible international financial centres and recognized global exchanges. Indian residents and Non-Resident Indians (NRIs) will not be eligible to trade or hold these DRs to prevent the circumvention of domestic investment norms.

Widening the Offshore Capital Pool

India's REIT and InvIT segments have expanded rapidly over the past few years, emerging as core vehicles for monetizing operational toll roads, power transmission networks, renewable assets, warehousing, and prime commercial real estate. However, foreign institutional participation had remained largely restricted to direct onshore routes, which require navigating domestic custody, foreign portfolio investor (FPI) documentation, and currency exposure.

By permitting DR listings, foreign pension funds, sovereign wealth managers, and family offices can transact in foreign currency on overseas bourses without having to directly set up onshore accounts in Mumbai.

The board also deliberated complementary measures to enhance operational flexibility for hybrid vehicles, including allowing REITs and InvITs to hold minority stakes in third-party under-construction projects within established exposure thresholds and streamlining Offer-for-Sale (OFS) cooling-off norms.

Detailed circulars outlining specific procedural guidelines, depository agreements, and exchange reporting requirements will be notified separately by the regulator to operationalize the route.

Tags: SEBI Real Estate Infrastructure REITs InvITs Capital Markets