Markets regulator SEBI (Securities and Exchange Board of India) has expanded the options for fresh borrowings by Infrastructure Investment Trusts (InvITs) whose net debt exceeds 49 percent of their asset value. This alteration, effective immediately, aims to provide InvITs with enhanced flexibility in managing their funding needs.
In a circular issued by SEBI, it was stated that InvITs are now allowed to utilize such borrowings for capital expenditures aimed at improving asset performance and capacity enhancement. Additionally, these funds can be allocated for significant maintenance costs associated with road projects. SEBI clarified that “major maintenance” refers to non-routine expenses aligning with obligations in concession agreements.
The new guidelines also allow InvITs, their special purpose vehicles (SPVs), or holding companies to refinance existing debt under specific conditions. The original debt must have been utilized for purposes sanctioned by regulatory guidelines, and only the principal amount may be refinanced; accrued interest, fees, and other charges will not qualify for refinancing.
These regulatory changes follow amendments to the SEBI (Infrastructure Investment Trusts) Regulations made in April, which enabled additional borrowing beyond the 49 percent threshold for designated purposes.
In a separate circular, SEBI clarified that an SPV managing an infrastructure project continues to be classified as an SPV even after the concession agreement or similar contracts end, subject to certain conditions. The investment manager of the InvIT is required to exit from the investment in such SPVs through sale, liquidation, winding up, or merger, or acquire a new infrastructure project within a year of the contract’s conclusion or termination, completion of pending claims, litigation, tax assessments, or defect liability period.
Time spent obtaining statutory or regulatory approvals for the aforementioned exit strategies will not count toward this one-year timeline. Until a new investment is made or an exit is executed, InvITs must include detailed disclosures in their annual reports.
These disclosures will encompass the value of investments in SPVs, project specifics, status of vesting certificates, assets and liabilities, contingent liabilities, debt repayment schedules, asset adequacy to meet liabilities, and the proposed exit strategy and timeline.
Published on May 15, 2026
