SEBI notifies REIT Second Amendment Regulations, 2025 and InvIT Third Amendment Regulations, 2025

In a move to further align the regulatory regime for investment trusts with global standards and promote transparency, the Securities and Exchange Board of India (SEBI) has introduced the Securities and Exchange Board of India (Real Estate Investment Trusts) (Second Amendment) Regulations, 2025 (REIT Amendment Regulations) and the Securities and Exchange Board of India (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2025 (InvIT Amendment Regulations) on September 1, 2025. The amendments bring about several operational and compliance changes that impact sponsors, managers, trustees, and unitholders of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

REIT Amendment Regulations and InvIT Amendment Regulations shall collectively be referred as Amendment Regulations.

Key highlights of the Amendment Regulations are outlined below:

1. Revised the criteria for ‘Public’ Unitholders: The definition of the term ‘public’ has been amended to exclude: (i) the related parties of a REITand InvIT (ii) sponsor, sponsor group, or manager; (iii) any other person as may be specified by SEBI.  However, Qualified Institutional Buyers (QIBs), even if otherwise excluded, shall be considered as ‘public’ in an offer. This amendment draws a clear distinction between promoters and genuine public investors of investment trusts.

2. Revised timelines for Development Status Disclosures: REITs and InvITs are now required to provide updates on the development status of under-construction properties/projects in alignment with SEBI specified timelines for quarterly financial results, rather than the earlier prescribed period of 30 days from the end of the quarter. 

3. Streamlining submission of Valuation Reports: The Amendment Regulations harmonize the submission timelines for annual and half-yearly property valuation reports by managers of the investment trusts to both the trustee and stock exchanges with the timelines prescribed by SEBI for submission of financial results, enabling simultaneous and consistent disclosures to all stakeholders. Additionally, the requirement to mandatorily provide valuation reports to unitholders, unless specifically stipulated, has been removed. It be noted that half-yearly valuation reporting is only required to be undertaken by publicly listed InvITs.

Further, publicly and privately placed InvITs with leverage more than 49% are required to file quarterly valuation reports in respect of their assets along with submission of quarterly financial results.

All other valuation reports, such as those prepared during unit issuance or asset acquisitions, must be forwarded by REITs and InvITs to both the stock exchanges and the trustee within 15 days of receipt. 

4. Rationalization of Cash Flow Distribution: To account for complex group structures, if a holding company reports negative cash flows, such amounts may now be offset against positive cash flows from underlying special purpose vehicles (SPVs). Details of this offset are required to be disclosed to unitholders of the investment trusts in accordance with SEBI’s prescribed formats. 

5. Minimum Investment Threshold for Privately placed InvITs: The minimum investment amount for privately placed InvITs has been reduced from the earlier threshold of INR 1,00,00,000 to INR 25,00,000. Further, the requirement of investing a minimum amount of INR 25,00,000 for privately placed InvITs investing not less than 80% of the value of assets of such InvITs in completed and revenue-generating assets has been removed.

 Conclusion:

The Amendment Regulations underscore SEBI’s ongoing commitment to building a robust regulatory landscape for investment trusts in India. By refining public unitholder definitions, standardizing disclosures, and strengthening the valuation and cash flow distribution framework, SEBI aims to ensure greater accountability and foster confidence among domestic and international investors.