Is SEBI Planning to Include REITs and InvITs in Market Indices?
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Synopsis
SEBI's active consideration of including REITs and InvITs in major indices could transform India's investment landscape. This strategic move aims to boost liquidity and institutional participation, vital for meeting the nation's long-term infrastructure needs. Will this decision reshape the market dynamics? Discover the implications of this potential policy shift.
Key Takeaways
- SEBI is considering including REITs and InvITs in major market indices.
- This could enhance liquidity and visibility for these investment vehicles.
- India is the fourth-largest REIT market in Asia.
- Current retail participation is only 1%.
- SEBI aims to lower minimum investment thresholds to attract more investors.
New Delhi, Nov 21 (NationPress) The Chairman of SEBI, Tuhin Kanta Pandey, announced on Friday that the regulatory body is currently evaluating the potential inclusion of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in major market indices. This initiative is being considered as part of a carefully structured, phased approach, which could significantly enhance liquidity, visibility, and institutional engagement in these investment instruments.
At an event in the national capital, Pandey characterized this as a strong policy signal for India's burgeoning REIT and InvIT sector, emphasizing the need for these instruments to play a more substantial role in financing the nation’s long-term infrastructure requirements.
“India ranks as the fourth-largest REIT market in Asia, yet activity remains minimal. Retail investment accounts for merely 1 percent, and trading volumes are still quite low,” he stated.
As of October, the total assets managed by REITs and InvITs amounted to Rs 9.25 trillion, spread across 24 listed InvITs and various listed REITs.
Pandey indicated that SEBI is considering a series of modifications to broaden market access, which includes permitting more liquid mutual funds to invest in these financial products, classifying REITs as equity to boost liquidity, and reducing minimum investment thresholds to attract a larger investor base.
He also mentioned that large non-banking financial companies could serve as anchor investors to strengthen the market.
The SEBI chairman highlighted that India's forthcoming phase of infrastructure development must increasingly depend on capital markets. According to NabFiD, Rs 700 trillion in investments will be required by 2047 to facilitate growth in sectors like power and urban transport.
Pandey noted that SEBI is collaborating with the finance ministry and state governments to expedite public asset monetization. He pointed out that public-sector entities such as NHAI, while not listed, can more readily initiate InvITs. Additionally, the processes for capital raising through IPOs and rights issues will continue to be streamlined.
While reiterating the importance of governance and investor protection, Pandey stressed that enhanced communication is essential to foster broader participation.
“Investor surveys indicate that individuals prefer receiving information in languages they are comfortable with, making simplified and accessible outreach crucial for the expansion of these products,” he added.
Point of View
SEBI's evaluation of including REITs and InvITs in market indices represents a critical step towards strengthening India's financial markets. This initiative, if executed effectively, could stimulate investor interest and enhance liquidity, ultimately supporting the country's infrastructure development goals.
NationPress
21/11/2025
Frequently Asked Questions
What are REITs?
REITs, or Real Estate Investment Trusts, are companies that own, operate, or finance income-generating real estate. They provide a way for individual investors to earn a share of the income produced through commercial real estate ownership without actually having to buy, manage, or finance any properties.
What are InvITs?
Infrastructure Investment Trusts (InvITs) are investment vehicles that pool money from investors to invest in infrastructure projects. They aim to provide returns to investors from the income generated by these projects.
How will including REITs and InvITs in market indices benefit investors?
Inclusion in major market indices could enhance the visibility and liquidity of REITs and InvITs, attracting more institutional and retail investors, which may lead to better pricing and investment opportunities.
What is SEBI's role in this regard?
SEBI, or the Securities and Exchange Board of India, is the regulatory authority overseeing the securities market in India. Its role in evaluating the inclusion of REITs and InvITs is crucial for ensuring fair practices and protecting investor interests.
What is the current status of REITs and InvITs in India?
As of October, the combined assets under management of REITs and InvITs in India stood at Rs 9.25 trillion, but retail participation remains low, indicating room for growth in this sector.
