SEBI Expands Strategic Investor Definition to Boost REITs and InvITs

SEBI has broadened the strategic investor definition under REIT and InvIT norms, aiming to attract more institutional capital. The move reclassifies REITs as equity, promoting increased mutual fund investments, and revises exit load and incentives to enhance investor protection and financial inclusion.

The Securities and Exchange Board of India (SEBI) announced on Friday a significant expansion to the definition of 'strategic investor' in the context of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This revision includes Qualified Institutional Buyers (QIBs) and specific categories of Foreign Portfolio Investors (FPIs), a move expected to attract more institutional capital.

The SEBI board has also approved a proposal to reclassify REITs as 'equity' investments and retain the 'hybrid' category for InvITs. This change is designed to facilitate mutual funds and Specialised Investment Funds' participation in these sectors by aligning them closer with global standards.

In addition to broadening investment opportunities, SEBI is implementing changes in the mutual funds sector. These include a reduction in the maximum permissible exit load from 5% to 3% and an incentive structure for distributors to onboard new women investors and investments from beyond the top 30 cities in India.

(With inputs from agencies.)