Sebi eases InvIT, REIT rules for HNIs: ₹25 Lakh now enough to get started

The Securities and Exchange Board of India (Sebi) has made it easier for investors to access Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs) by lowering the minimum ticket size for primary market investments.

Starting September, investors can participate in privately placed InvITs with ₹25 lakh, compared with the earlier steep thresholds of ₹1 crore or even ₹25 crore depending on the asset mix. This brings the primary market in line with the secondary market, where the minimum lot size was already ₹25 lakh. Sebi notified rules on Tuesday to reduce the minimum allotment lot in the primary market for privately placed infrastructure investment trusts (InvITs).

For affluent individuals and family offices looking to diversify beyond stocks, bonds, or mutual funds, this reform opens the door to infrastructure-backed income streams. InvITs typically distribute stable cash flows generated by toll roads, power projects, or telecom towers, while REITs offer exposure to commercial real estate like office parks and malls. By reducing the barrier to entry, Sebi is making these asset classes more accessible to investors who earlier found the upfront commitment too high.

Sebi has also clarified the classification of “public” unitholders in REITs and InvITs. Under the new rules, units held by related parties of the sponsor, investment manager, or project manager will not be counted as “public” — unless such entities are Qualified Institutional Buyers (QIBs), in which case they will be included. This widens the pool of units qualifying as public shareholding.

In another relief, Sebi has allowed holding companies (holdcos) to offset their own negative cash flows against inflows from underlying special purpose vehicles (SPVs) before distributing funds to InvITs/REITs, provided adequate disclosures are made. Earlier, holdcos were required to distribute 100% of cash received from SPVs, irrespective of their own balance sheets.

To improve transparency, Sebi has also aligned the timelines for quarterly, valuation, and financial reporting, eliminating the earlier mismatch. Additionally, the regulator has simplified the format for portfolio manager disclosure documents, which now must be shared with clients along with a certificate in Form C before signing agreements.

The bottom line: If you’re an HNI or seasoned investor with at least ₹25 lakh to commit, InvITs and REITs are now easier to access and could serve as a steady income-generating addition to your portfolio.

But like all investments, they come with risks tied to interest rates, asset performance, and market demand for infrastructure and real estate.