SEBI Prepares Rules Allowing REITs and InvITs to Acquire Third-Party Assets — October 22, 2026

The Securities and Exchange Board of India (SEBI) is working on regulatory norms that will permit Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to acquire projects directly from third-party sellers. The move is designed to widen the operating universe of hybrid investment vehicles and accelerate public sector asset monetisation across India.

Speaking in an exclusive interaction with NDTV Profit, Maninder Cheema, Executive Director at SEBI heading the Department of Debt and Hybrid Securities, stated that the regulator will announce the next steps on the proposed framework after taking forward its consultations.

Broadening Pipelines Beyond Sponsors

Currently, Indian REITs and InvITs rely primarily on asset transfers and project pipelines originating from their respective parent sponsors. Permitting trusts to purchase external and third-party assets is expected to:

• Broaden the pool of income-generating commercial real estate and operational infrastructure assets available for securitisation.
• Provide developers and construction companies with an exit route to offload mature, revenue-generating assets to listed investment vehicles.
• Enable hybrid trusts to diversify their geographic and operational risks rather than remaining dependent solely on sponsor-developed assets.

Cheema indicated that formalising this third-party framework would give trusts greater operational flexibility while creating broader participation avenues in the market.

Unlocking Public and CPSU Land Parcels

Beyond private asset transactions, SEBI is actively coordinating with the Union government on large-scale asset monetisation programs. A key focal point of this engagement is unlocking surplus and underutilised real estate assets held by Central Public Sector Undertakings (CPSUs).

The monetisation of state-owned commercial land and infrastructure assets has been an anchor priority under the government's National Monetisation Pipeline. Cheema stressed that a decisive regulatory and policy push is vital to transition idle public assets into yield-producing financial instruments, making REIT and InvIT frameworks suitable vehicles to house these state properties.

Demat 2.0 to Introduce Tokenised Bond Trading

Alongside reforms in the hybrid space, Cheema highlighted SEBI’s technical roadmap for the corporate bond market. The capital markets regulator is advancing the development of the second phase of its Demat 2.0 initiative.

Key Focus Areas for Demat 2.0:

• Tokenised Bonds: The upcoming phase will establish infrastructure to facilitate the trading of tokenised bonds, building upon the foundations laid during the initial Demat 2.0 pilot.
• Timeline Flexibility: While the structural design and features are progressing, SEBI has not yet finalised a definitive rollout deadline for the second phase.
• Liquidity Deepening: By tokenising fixed-income securities and refining demat mechanisms, the regulator aims to lower friction for retail participants in secondary bond markets.

These complementary measures highlight SEBI’s ongoing shift toward expanding hybrid asset classes and introducing distributed, tokenised ledger technology into India's capital markets.

Tags: SEBI REITs InvITs Infrastructure Real Estate CPSUs