3 weeks ago
Sebi proposes REIT, InvIT minority stakes in under-construction projects
In India, there is a group called Sebi that makes sure the stock market is safe and fair.
Sebi has a new plan to help special funds called REITs and InvITs.
These funds buy things like malls, offices, roads, and power stations to earn money from them.
Usually, they only buy projects that are already finished.
Sebi's new plan would let them buy small parts of projects that are still being built.
Buying only a small part makes it less risky, because the funds do not control the whole project.
As a safety rule, the funds can only invest in projects owned by other companies, not by their own sponsors.
Sebi also wants to count facilities like power plants, water treatment plants, and heating systems as real estate.
People can share their thoughts about this plan until August 27.
Sebi proposed allowing REITs and InvITs to acquire minority stakes in under-construction projects.
Minority investments would only be allowed in third-party projects, with sponsors barred from any interests in the investee entity.
The move aims to help trusts build a long-term pipeline of income-generating assets while limiting construction risk.
Sebi also proposed easing rules, including recognising remote power, water treatment and waste facilities as real estate assets for REITs.
Public comments on the consultation paper have been invited until August 27.
- Who
- Sebi, India's markets regulator
- What
- Proposed allowing REITs and InvITs to make minority investments in under-construction projects
- Where
- India
- When
- Proposal announced on Thursday; comments open until August 27
- Why
- To help the trusts build a long-term pipeline of income-generating assets while limiting construction risk
Key facts
- Regulator
- Securities and Exchange Board of India (Sebi)
- Proposal
- Allow REITs and InvITs to make minority investments in under-construction projects
- Restriction
- Third-party projects only; sponsors and sponsor group entities must have no interests in the investee
- Objective
- Long-term pipeline of income-generating assets with limited construction risk
- Other measures
- Reduced cooling-off period for InvIT offer-for-sale; remote infrastructure recognised as real estate assets
- Approval threshold
- Unit-holder approvals based on total votes cast instead of value
- Comment deadline
- August 27
Sources
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