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Sebi Redefines Strategic Investors to Boost REIT InvIT Growth

2nd August 2025

4 Min Read

Sebi Redefines Strategic Investors

Expanding Horizons for Strategic Investors

In the evolving landscape of India’s real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), the Securities and Exchange Board of India Sebi steps forward with a transformative proposal. Announced in a recent consultation, Sebi aims to broaden the definition of strategic investors—a move designed to unlock a larger pool of institutional capital and invigorate the sector.

Currently, the strategic investor category under REIT and InvIT frameworks is narrowly defined, excluding several heavyweight institutional players such as pension funds, provident funds, and insurance funds. Despite their active role and preference for long-term, stable income-yielding assets, these entities have not qualified under the existing definitions.

Key Proposed Changes and Their Impact

  • Inclusion of Qualified Institutional Buyers QIBs and certain Foreign Portfolio Investors FPIs in strategic investor criteria
  • Allowing public financial institutions pension and provident funds and armed forces managed insurance funds to qualify
  • FPIs who are individuals corporate bodies or family offices excluded from the strategic investor category
  • Mandated minimum investment of 5 per cent and cap of 25 per cent of total offer size in REIT or InvIT issues
  • Requirement to enter binding subscription agreements before public issue opening
  • Application of a 180-day lock-in period post-listing for strategic investor investments

This redefinition stands to encourage new institutional players, enhancing liquidity and stability in REIT and InvIT markets. By inviting public comments until August 22, Sebi is fostering collaborative refinement, ensuring the regulations resonate with industry realities and growth ambitions.

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