The Securities and Exchange Board of India (SEBI) on Thursday announced new regulations that grant Infrastructure Investment Trusts (InvITs) increased flexibility in their borrowing activities while easing the rules associated with special purpose vehicles (SPVs) following the completion or termination of concession agreements.
Under the revised framework, SEBI has broadened the scope for InvITs to utilize borrowings when net liabilities exceed 49% of their asset value. This adjustment aims to boost asset performance and facilitate capacity expansion. Borrowings can now be used not only for enhancing asset productivity but also for major maintenance costs related to road projects and for refinancing existing debts, subject to specified conditions.
Refinancing is permitted exclusively for the principal amount of the original debt, provided that the initial loan was utilized for purposes allowed under regulatory guidelines. SEBI clarified that interest costs, penalties, and other charges are not eligible for refinancing under this new provision.
In a related circular, SEBI has relaxed the norms for SPVs managing infrastructure projects whose concession agreements have expired or been terminated. Such SPVs may continue to maintain their classification as SPVs if the InvIT either exits the investment or secures a new infrastructure project within one year.
The one-year period will commence after the completion of the project, the resolution of pending litigations or tax assessments, or the closure of the defect liability period. Time spent acquiring regulatory approvals for actions such as sales or liquidations will not be counted within this timeframe.
SEBI has also mandated additional disclosures from InvITs regarding such SPVs, which must include specifics about liabilities, pending claims, debt repayment schedules, and exit strategies. The regulator has requested a definitive plan outlining how and when the InvIT intends to divest its investment in the SPV or pursue new infrastructure projects.
These changes follow amendments to InvIT regulations made in April of this year, aimed at expanding permissible debt usage beyond established limits and allowing SPVs associated with completed projects to keep their classification under certain conditions. Such adjustments come amidst the ongoing growth of the InvIT market, increasingly being utilized by major infrastructure developers to monetize operational assets while securing long-term capital.
Published on May 15, 2026.
