SEBI Permits REITs and InvITs to Issue Depository Receipts Abroad via GIFT City Exchanges — November 3, 2026

The Securities and Exchange Board of India (SEBI) has notified a comprehensive operational framework enabling Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to issue foreign currency-denominated Depository Receipts (DRs) against their underlying units.

The regulatory move paves the way for Indian trusts to tap international institutional pools and retail foreign capital through permitted international stock exchanges operating within the International Financial Services Centre (IFSC) at GIFT City, Gujarat. Specifically, the frameworks allow listings on the India International Exchange (India INX) and the NSE International Exchange (NSE IX).

Under the framework issued through two separate circulars, investment trusts are permitted to issue fresh units or facilitate the transfer of existing units held by unitholders to back the creation of DRs. The depository receipts are foreign currency-denominated instruments issued by an overseas depository against underlying domestic units lodged with a domestic custodian in India.

Strict Unitholder Approval and Pricing Rules

To protect domestic investor interests and ensure governance standards, SEBI has laid out specific safeguards for any depository receipt issuance:

• 75% Approval Threshold: Any fresh issuance of DRs requires prior approval from unitholders, with at least 75% of votes cast in favor of the resolution.
• Exemptions to Voting: This 75% approval requirement will not apply if a REIT or InvIT undertakes an initial domestic public offering alongside a simultaneous DR issue on an international exchange, or for subsequent issuances within an overall limit already approved by unitholders.
• Pricing Parity: Units issued for depository receipts cannot be priced lower than the price offered to domestic investors for a corresponding offering.
• Equal Opportunity for Exits: Where existing unitholders transfer their units for secondary DR issuances, the trust must provide all existing unitholders an equitable opportunity to participate and tender units.

Eligibility Norms and Compliance Oversight

The market regulator has barred Indian residents from subscribing to or holding these depository receipts, including through beneficial ownership, placing the onus of verifying residency compliance on the DR holders and their beneficial owners.

Furthermore, SEBI stipulated that issuing trusts, their sponsors, investment managers, directors, partners, and selling unitholders must not be debarred from the securities market, nor can they be categorized as wilful defaulters or fugitive economic offenders.

Investment managers of REITs and InvITs will be required to appoint a SEBI-registered merchant banker to supervise end-to-end compliance with the issuance guidelines. For fresh issuances, the draft offer document must be filed with SEBI and domestic stock exchanges through the merchant banker, with the regulator aiming to convey its observations within seven working days of receipt.

The reform marks a major milestone in standardizing cross-border access for India's growing trust ecosystem, offering high-yielding infrastructure and commercial real estate platforms access to dollar liquidity without subjecting overseas investors to domestic currency settlement hurdles.