To attract more capital and widen the investor base for REITs and InvITs, SEBI has proposed allowing foreign investors and qualified institutional buyers to act as strategic investors.
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FRANCIS MASCARENHAS/Reuters
To widen the investor base of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) and attract more capital the Securities and Exchange Board of India has proposed bringing in foreign investors and qualified institutional buyers under the ambit of strategic investors who invest in them.
Strategic investors invest 5-25 per cent of the total offer size of the REIT or InvIT and come in prior to the offer to instil confidence in the asset class.
QIBs may now qualify under revised definition
In a consultation paper issued on Friday to amend the definition of ‘strategic investor’ in a REIT or InvIT issue, it said it “proposed to amend the definition of Strategic Investor to provide that an entity who is considered a QIB under the ICDR (Issue of Capital and Disclosure Requirements) Regulations, may apply as ‘Strategic Investor’.”
“It is noted that the extant definition of Strategic Investor includes only a select few investors,” the paper said, pointing out that the definition was narrow in scope and did not include many institutional investors like public financial institutions, insurance funds, provident funds, and pension funds who also make investments in units of REITs and InvITs “as it aligns with their investment mandate of long -term, stable, income generating investments.”
Due to the narrow definition, they were unable to apply for the units of REITs and InvITs in a public issue, and the trusts were unable to attract capital.
Compared to the current narrow definition of strategic investors, that of QIBs was wider, the paper noted.
It also said that foreign investors, other than individuals, corporate bodies, and family offices, would also be included as strategic investors.
The last date for submitting comments is August 22.
Published on August 1, 2025
