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Sebi proposes depository receipts for Indian REITs and InvITs
The proposal would let foreign investors trade receipts linked to REIT and publicly offered InvIT units in international markets and foreign currency, while excluding privately listed InvITs.
India’s securities regulator, Sebi, has proposed a framework that would allow Real Estate Investment Trusts, REITs, and Infrastructure Investment Trusts, InvITs, to raise funds from foreign investors through depository receipts. In a consultation paper issued Tuesday, Sebi said the change is intended to address a regulatory gap, because while foreign investors are already allowed to invest in REITs and InvITs under India’s foreign investment rules, the REIT and InvIT regulations do not currently spell out provisions for issuing depository receipts against their units. Under the proposal, depository receipts would be issued against REIT units and publicly offered InvIT units. The units would remain backed by domestic assets, while foreign investors would be able to trade corresponding receipts in international markets, in foreign currency. Sebi also said the plan would exclude privately listed InvITs, which typically have large ticket sizes and trading lots of ₹25 lakh and are largely limited to institutional investors and corporates. Sebi added that the operational details for issuing depository receipts against REIT and InvIT units will be set out separately in a future circular.