SEBI proposes including QIBs, select FPIs as strategic investors in REITs, InvITs
The move aims to attract more capital by including QIBs and select FPIs.
- Aug 1, 2025,
- Updated Aug 1, 2025 9:55 PM IST
The Securities and Exchange Board of India (SEBI) has floated a proposal to expand the definition of "strategic investors" in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to include qualified institutional buyers (QIBs) and certain categories of foreign portfolio investors (FPIs).
In a consultation paper released on Friday, SEBI suggested amending the REIT and InvIT regulations to allow entities already recognised as QIBs under the SEBI (Issue of Capital and Disclosure Requirements) Regulations to qualify as strategic investors in these vehicles. The move is aimed at deepening the investor base and improving the ease of capital raising for infrastructure and real estate trusts.
Strategic investors are required to invest between 5% and 25% of the total offer size, and receive unit allotments ahead of the public issue. Currently, the category is restricted to a relatively narrow group of institutions, excluding many active investors such as public financial institutions, insurance firms, provident funds, and pension funds.
SEBI noted that these exclusions limit the potential of REITs and InvITs to raise capital from otherwise eligible and willing long-term investors. The proposed change would address that gap by allowing a broader set of institutional players to participate strategically.
The regulator also proposed a clarification regarding FPIs. While institutional FPIs may be included under the strategic investor umbrella, individual investors, body corporates, and family offices registered as FPIs would remain excluded, consistent with their current ineligibility as QIBs under SEBI's regulations.
SEBI emphasized that allowing institutional FPIs and QIBs to participate as strategic investors could lead to stronger pre-issue support, increased investor confidence, and greater capital inflow into the infrastructure and real estate sectors — areas critical to India's long-term growth.
Public comments on the proposal are invited until August 22, 2025.
The Securities and Exchange Board of India (SEBI) has floated a proposal to expand the definition of "strategic investors" in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to include qualified institutional buyers (QIBs) and certain categories of foreign portfolio investors (FPIs).
In a consultation paper released on Friday, SEBI suggested amending the REIT and InvIT regulations to allow entities already recognised as QIBs under the SEBI (Issue of Capital and Disclosure Requirements) Regulations to qualify as strategic investors in these vehicles. The move is aimed at deepening the investor base and improving the ease of capital raising for infrastructure and real estate trusts.
Strategic investors are required to invest between 5% and 25% of the total offer size, and receive unit allotments ahead of the public issue. Currently, the category is restricted to a relatively narrow group of institutions, excluding many active investors such as public financial institutions, insurance firms, provident funds, and pension funds.
SEBI noted that these exclusions limit the potential of REITs and InvITs to raise capital from otherwise eligible and willing long-term investors. The proposed change would address that gap by allowing a broader set of institutional players to participate strategically.
The regulator also proposed a clarification regarding FPIs. While institutional FPIs may be included under the strategic investor umbrella, individual investors, body corporates, and family offices registered as FPIs would remain excluded, consistent with their current ineligibility as QIBs under SEBI's regulations.
SEBI emphasized that allowing institutional FPIs and QIBs to participate as strategic investors could lead to stronger pre-issue support, increased investor confidence, and greater capital inflow into the infrastructure and real estate sectors — areas critical to India's long-term growth.
Public comments on the proposal are invited until August 22, 2025.