The Securities and Exchange Board of India (SEBI) is considering new measures to expand the investment pool for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), which would facilitate the inclusion of REITs in various indices, stated SEBI Chairman Tuhin Kanta Pandey during a summit on Friday.
Pandey indicated that the regulator is reviewing a proposal to broaden the range of liquid mutual fund schemes allowed to invest in REITs and InvITs, while ensuring investor protection. He added that discussions are ongoing regarding whether private InvITs might also invest in greenfield projects, provided adequate safeguards are in place.
Currently, there are five listed REITs and 24 listed InvITs, covering sectors such as roads, power transmission, renewables, telecom, warehousing, and commercial real estate. The total Assets Under Management for REITs, InvITs, and Small and Medium (SM) REITs is estimated to be around ₹9.25 lakh crore, with approximately ₹7 lakh crore in InvITs and ₹2.25 lakh crore in REITs and SM REITs.
Pandey also emphasized SEBI’s efforts to engage institutional investors to enhance their participation in REITs and InvITs. The regulator is coordinating with the Finance Ministry and various state governments to expedite the monetization of public assets. “We are collaborating with IRDAI, PFRDA, and EPFO to facilitate greater participation from their respective entities. SEBI aims to work with all stakeholders to incorporate REITs in indices, following an appropriate glide path,” he said.
Despite these initiatives, retail participation remains low, with SEBI’s investor survey revealing that awareness of these financial instruments is around 10%, and penetration is less than 1%. “This situation must change. Retail investors should consider these instruments as viable options in their portfolios alongside equities, mutual funds, bonds, and bank deposits,” Pandey stressed.
In recent months, SEBI has implemented various measures to make these investment products more appealing to retail investors, increase liquidity, and strengthen regulations. A significant development occurred in September when SEBI approved the classification of REITs as equity, while maintaining a ‘hybrid’ classification for InvITs.
This reclassification allows mutual fund investments in REITs to fall within the equity allocation limits, making them eligible for inclusion in equity indices, thereby potentially increasing investment flows from mutual fund schemes. “The reclassification as equity will enable equity mutual funds to allocate more meaningfully and facilitate index inclusion and passive flows,” Pandey noted. This change also allows for greater investment opportunities in InvITs from mutual funds on the hybrid side.
Furthermore, SEBI has reduced entry thresholds for InvITs to widen the potential participant pool and enhance liquidity. Pandey highlighted the establishment of a Maharashtra Infrastructure Investment Trust as a pivotal step toward enabling state-level infrastructure financing.
Alok Agarwal, Chairperson of the Indian REITs Association, recognized the substantial growth of India’s REIT platform, which encompasses over 176 million square feet of Grade A assets and a growing base of more than 330,000 unitholders. “REITs serve as engines of urban development, job creation, and capital formation,” he remarked. N.S. Venkatesh, CEO of Bharat InvITs Association, projected that the InvIT industry could expand threefold, from its current AUM of ₹7 lakh crore to ₹21 lakh crore by 2030, paving the way for broader access to retail financial savings.
Published on November 21, 2025.
