SEBI revises the framework for conversion of Private Listed InvITs into Public InvITs

The Securities and Exchange Board of India (SEBI) has issued a circular dated August 8, 2025 (Circular), revising provisions of Chapter 14 of the Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024. These revisions are intended to facilitate a smoother transition from private listed InvITs to public InvITs, reflecting market feedback and recommendations from the Hybrid Securities Advisory Committee.

Key highlights of the Circular are outlined below:

1. Alignment of Minimum Unitholding Requirements and Lock-in Periods for Sponsors and Sponsor Groups

• • • The Circular requires sponsors and their group entities to comply with the minimum unitholding requirements specified in the Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations) at all times. Collectively, sponsors and their group entities are required to hold at least 15% of the total outstanding units at the time of the public issue effected for the conversion of a private listed InvIT into a public InvIT.

• • • Further, sponsors and their group entities must adhere to the year-wise minimum contribution requirements as specified under the InvIT Regulations.

• • • The lock-in period applicable to units held by sponsors will now be aligned with the InvIT Regulations, requiring a three-year lock-in from the date of listing of the units, thereby ensuring consistency across all stages of InvIT operations.

2. Alignment with Follow-on Offer Procedures and Disclosures: The procedural and disclosure requirements for the public offer of units, undertaken as part of the conversion from a private listed InvIT to a public InvIT, have been aligned with those applicable to follow-on offers.

Conclusion:

The Circular, which takes effect immediately, represents a significant move towards streamlining and harmonizing the process of conversion of private InvITs into public InvITs. By tying in sponsor unitholding and lock-in norms to those provided under InvIT Regulations and aligning public issuances with follow-on offer norms, the amendments aim to ease compliance, improve transparency, and further strengthen India’s infrastructure investment market.