Sebi Opens New Foreign Investment Route for REITs and InvITs Through Depository Receipts
Mumbai, India | September 25, 2026: India’s real estate and infrastructure investment market is set for a regulatory change as Sebi’s board has approved a framework allowing Depository Receipts (DRs) to be issued against units of REITs and InvITs. The move is designed to make these investment vehicles more accessible to foreign capital.
Alongside the new foreign investment route, Sebi has changed voting thresholds for certain REIT and InvIT decisions, eased sponsor exit provisions and introduced a broader regulatory framework for bullion vault managers.
What Changed for REITs and InvITs
Sebi has approved amendments to the REIT Regulations, 2014 and InvIT Regulations, 2014 to enable the issuance of DRs against units of these trusts.
Depository Receipts are foreign-currency-denominated instruments issued by a foreign depository against securities held with a domestic custodian in India.
The regulatory change is intended to facilitate foreign capital participation in Indian REITs and InvITs.
For the real estate sector, the move could provide another channel through which international investors can gain exposure to income-generating commercial property held through REIT structures.
REIT and InvIT Voting Rules Become More Flexible
Sebi has also changed the voting mechanism for certain matters requiring unitholder approval.
Previously, some decisions required approval from holders representing at least 75% of all outstanding units, regardless of how many unitholders actually participated in the vote.
Under the revised framework, the 75% threshold will be calculated based on votes actually cast.
Sebi said the change addresses difficulties caused by dispersed ownership and the non-participation of some unitholders.
The change could make it easier for actively participating investors to influence important trust-level decisions.
Sponsor Exit Rules Get More Flexibility
Sebi has also revised the framework for exit offers when there is a change in the sponsor structure.
If one sponsor exits where there are multiple sponsors, the exit offer can now be made by:
- The outgoing sponsor or its group entities
- The continuing sponsor or its group entities
Sebi has also clarified that dissenting unitholders are those who vote against the relevant resolution. Investors who simply do not participate in the vote will not be treated as dissenting unitholders.
All units tendered under an exit offer will have to be accepted.
If the transaction causes public unitholding to fall below the prescribed minimum level, compliance will have to be restored within one year.
Why the Changes Matter for Property Investors
For investors tracking listed REITs, the DR framework is the most significant change because it creates an additional structure for attracting overseas capital.
REITs provide investors exposure to income-generating real estate without directly owning physical properties. Greater access to foreign capital could therefore have implications for the funding and investor base of India's listed real estate investment vehicles.
The revised voting rules also address a practical issue for trusts with large and dispersed unitholder bases, where a significant portion of investors may not participate in votes.
Sebi Tightens Rules for Bullion Vault Managers
The Sebi board has separately approved amendments to the Vault Managers Regulations, 2021.
The existing framework was primarily focused on vaulting services for gold underlying Electronic Gold Receipts (EGRs). The revised framework will become product-neutral and cover bullion underlying other Sebi-specified instruments, including:
- Gold ETFs
- Silver ETFs
- Bullion derivatives
- EGRs and other specified bullion-related instruments
The framework will strengthen requirements covering storage, safekeeping, segregation, reconciliation, security, insurance, governance and risk management.
Minimum Vault Manager Net Worth Raised to ₹75 Crore
Sebi has increased the minimum net worth requirement for vault managers from ₹50 crore to ₹75 crore.
Vault managers will also face stronger security requirements covering risks such as theft, burglary, fire, fraud, terrorism and cyber-attacks.
They will additionally be required to appoint a compliance officer.
Sebi said a consequential circular will set out operational requirements covering storage and safekeeping, quality standards, reconciliation, inspection, audit, insurance, security, infrastructure, risk management and grievance redressal.
What Happens Next
The approved amendments will need to be operationalised through the regulatory framework and consequential circulars.
For the real estate market, the key development to watch will be how the Depository Receipt route is implemented for REITs and InvITs and whether it expands participation from overseas investors.
The changes to voting and sponsor exit rules will also affect how major decisions and ownership transitions are handled within these investment structures.