SEBI Expands 'Strategic Investor' Definition for Enhanced REITs, InvITs Participation

SEBI has broadened the 'strategic investor' definition for REITs and InvITs to include more institutional investors, aiming to boost participation in public issues. Amendments now allow Qualified Institutional Buyers, like pension and insurance funds, to apply as strategic investors, enhancing investment flexibility and facilitating easier business operations.

In a significant move to bolster participation in real estate and infrastructure investment trusts, India's market regulator, SEBI, has widened the criteria for 'strategic investors' in REITs and InvITs. This regulatory shift is expected to attract more capital by encompassing a broader range of institutional investors.

The previous narrow definition excluded major institutional players such as pension and insurance funds. With these amendments, entities qualifying as Qualified Institutional Buyers, including public financial institutions and alternative investment funds, can now apply as strategic investors.

This initiative, approved by SEBI's board in September, aligns with the regulator's goal to enhance ease of doing business. Additionally, reclassifying REITs as equity-related instruments is expected to boost investments from mutual and specialised investment funds.

(With inputs from agencies.)