SEBI Expands Borrowing Flexibility for Infrastructure Trusts

SEBI has broadened borrowing allowances for Infrastructure Investment Trusts (InvITs) with debts over 49% of asset value. New rules permit borrowing for capital and maintenance expenses under specific conditions, and clarifications on SPV treatment post-concession highlight managerial duties and disclosure mandates.

The Securities and Exchange Board of India (SEBI) has expanded the permitted use of fresh borrowings by Infrastructure Investment Trusts (InvITs) whose net debt exceeds 49% of their asset value, to aid funding flexibility.

In a recent circular, SEBI stated InvITs could leverage these borrowings for capital expenditure aimed at boosting asset performance or for augmenting capacity, as well as for significant maintenance expenses related to road projects.

SEBI also clarified refinancing rules for InvIT-related debts and addressed the status of Special Purpose Vehicles (SPV) post-concession agreements, laying out specific conditions and disclosure requirements.