On April 17, 2025, SEBI released a consultation paper proposing significant reforms to ease mutual fund investment norms in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). These proposals aim to reclassify REITs and InvITs as equity instruments, enhance investment limits, and provide mutual funds with greater flexibility to participate in India’s growing real estate and infrastructure sectors.
Key Highlights
‣ Reclassification of REITs and InvITs as equity instruments
‣ Increase in mutual fund investment limits from 10% to 20% for equity and hybrid schemes
‣ Enhanced portfolio diversification opportunities for investors
‣ Simplified access to India’s real estate and infrastructure growth without direct ownership
‣ Steady cash flow potential with mandatory 90% distribution of net distributable cash flows by REITs/InvITs
‣ Improved liquidity and market visibility for REITs and InvITs
