New Delhi: Market regulator Sebi on Thursday proposed expanding the scope of investment in liquid mutual fund schemes by REITs and InvITs, as existing eligibility criteria limit investment options. Currently, such investments are restricted to liquid schemes with a high credit risk value and top risk classification.
The proposals are part of Sebi's effort to facilitate ease of doing business measures at Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Sebi said it is examining changes to provide greater investment flexibility for REITs and InvITs while maintaining appropriate prudential safeguards.
In its consultation paper, Sebi also proposed allowing InvITs to continue holding investments in special purpose vehicles (SPVs) even after the expiry or termination of concession agreements, acknowledging that such entities may need to remain operational to meet statutory, contractual, tax or litigation-related obligations. To facilitate this, Sebi has proposed amending the definition of SPV, subject to conditions including a defined exit or reinvestment timeline and enhanced disclosures at both the InvIT and SPV levels.
The regulator has also proposed aligning investment conditions for private InvITs with those applicable to public InvITs in relation to greenfield projects. The proposed amendment will "facilitate privately listed InvITs to invest into pure green field projects up to 10 per cent of the value of the InvIT asset". Sebi has also proposed expanding the permitted use of fresh borrowings by InvITs where net borrowings exceed 49 per cent of asset value. The regulator has invited public comments on the proposals until February 26.
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