Infrastructure Investment Trusts (2014)

Policy Update
Sudeepti Joshi

Background

Infrastructure Investment Trusts (InvITs) allow investors to participate in infrastructure assets without having to own or manage projects directly. These trusts pool capital and invest in assets such as highways, power transmission networks and renewable energy infrastructure. Investors purchase units in the trust and may receive distributions from the cash flows generated by its assets.

SEBI notified the SEBI (Infrastructure Investment Trusts) Regulations, 2014, on September 26, 2014. The framework was intended to provide an additional route for infrastructure financing by connecting investors with income-generating infrastructure assets (Securities and Exchange Board of India [SEBI], 2025b).

The market has grown since then. SEBI reported 22 listed InvITs as of May 31, 2025, compared with four listed Real Estate Investment Trusts (REITs). The combined asset value of REITs and InvITs was approximately ₹8 lakh crore as of March 31, 2025 (SEBI, 2025b).

However, the number of listed trusts does not tell the whole story. Trading activity varies across instruments, and investors may find it easier to buy or sell units in some trusts than in others.

Functioning

InvITs pool capital and invest in infrastructure projects, either directly or through special purpose vehicles (SPVs) and holding companies. SEBI’s regulations govern asset allocation, valuation, disclosures, distributions and the responsibilities of the investment manager and trustee.

Publicly offered and privately placed InvITs operate under different conditions. Publicly offered InvITs are generally required to invest at least 80% of their asset value in completed and revenue-generating projects. Privately placed InvITs can have greater exposure to projects under construction, which may involve higher execution risks and less predictable cash flows (SEBI, 2025b).

SEBI’s June 2025 Board Memorandum examined the gap between the minimum investment required to participate in a privately placed InvIT’s primary issue and the amount needed to buy its units in the secondary market. Before the change, the primary-market minimum was ₹1 crore, or ₹25 crore where the InvIT invested at least 80% of its assets in completed and revenue-generating projects. The secondary-market trading lot was ₹25 lakh (SEBI, 2025b).

The memorandum proposed aligning the primary-market minimum with the trading lot, so that investors already eligible to trade units could take part in new fundraising. Of the six respondents who commented on the proposal, five agreed and one partly agreed. SEBI did not remove the ₹25 lakh floor altogether. Its reasoning was that privately placed InvITs face no limit on investment in projects under construction, carry higher execution risk and are therefore meant for sophisticated investors (SEBI, 2025b).

The change has since been made. SEBI’s Board approved it in June 2025, and the SEBI (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2025, notified on September 1, 2025, set a uniform minimum investment of ₹25 lakh for privately placed InvITs, whatever their asset mix (SEBI, 2025d).

Performance

SEBI’s September 2025 Board Memorandum reported trading values and market capitalisation for all 22 listed InvITs as of March 31, 2025. Table 1 reproduces them.

Table 1: Listed InvITs by average daily trading value, March 2025 (₹ crore)

Sr.	Name of InvIT	Public / Private	Avg. daily trading value	Free-float market cap	Full-float market cap
1	National Highways Infra Trust	Private	70.20	21,887	25,847
2	PowerGrid	Public	28.34	5,878	6,915
3	Anzen India Energy Yield Plus Trust	Private	18.33	890	2,080
4	IndiGrid Infrastructure Trust	Public	10.14	11,618	11,760
5	Cube InvIT	Private	8.27	8,548	16,080
6	Altius Telecom Infrastructure Trust	Private	5.64	1,784	44,263
7	IRB InvIT Fund	Public	4.00	2,364	2,903
8	Interise Trust	Private	3.93	9,221	23,503
9	Indus Infra Trust	Public	3.86	4,046	4,760
10	Capital Infra Trust	Public	3.39	1,411	2,438
11	Shrem InvIT	Private	1.34	2,346	7,025
12	Sustainable Energy Infra Trust	Private	1.10	825	3,499
13	NDR InvIT Trust	Private	0.58	2,478	4,158
14	Energy Infrastructure Trust	Private	0.27	1,407	5,627
15	IRB Infrastructure Trust	Private	NA	17,196	35,108
16	Digital Fibre Infrastructure Trust	Private	NA	9,889	19,380
17	Roadstar Infra Investment Trust	Private	NA	3,550	3,550
18	Maple Infrastructure Trust	Private	NA	1,268	5,071
19	Intelligent Supply Chain Infrastructure Trust	Private	NA	400	3,048
20	Vertis Infrastructure Trust	Private	NA	NA	12,673
21	Oriental InfraTrust	Private	NA	NA	NA
22	Nxt-Infra Trust	Private	NA	NA	NA

Source: SEBI (2025a), para 4.7. Market capitalisation as on March 31, 2025; NA means the figure is not available in the source table.

The difference in trading activity is substantial. National Highways Infra Trust recorded an average daily trading value of ₹70.20 crore, compared with ₹0.58 crore for NDR InvIT Trust. SEBI’s table shows no trading value (NA) for eight trusts, and all eight are privately placed. SEBI itself notes that many InvITs do not trade on exchanges for many days (SEBI, 2025a).

Trading is also concentrated. National Highways Infra Trust alone accounts for about 44% of the combined daily trading value of the 14 trusts with data. The four listed REITs traded ₹201 crore a day between them, more than the roughly ₹159 crore traded across those 14 InvITs (calculated from SEBI, 2025a).

The data separate listing from liquidity. Listing makes units available for exchange trading, but it does not guarantee that an investor can sell a large holding quickly at a reasonable price. Low trading activity can increase transaction costs and make prices more sensitive to individual orders.

Mutual fund holdings provide another indicator of institutional participation. As of March 31, 2025, mutual funds held ₹5,409 crore in InvITs, compared with ₹14,410 crore in REITs. SEBI noted that exposure to both categories remained small relative to the mutual fund industry’s overall assets under management of approximately ₹66 lakh crore (SEBI, 2025a).

In September 2025, SEBI considered whether REITs and InvITs should be reclassified as equity instruments for mutual fund investment purposes. It proposed reclassifying REITs as equity-related instruments while retaining the hybrid classification for InvITs. The distinction reflected differences in their underlying assets, risk-return profiles and liquidity. REITs were subsequently reclassified with effect from January 1, 2026, while InvITs retained their hybrid classification (SEBI, 2025a, 2025c).

Impact

The most direct change for investors is the lower entry ticket. The primary-market minimum for privately placed InvITs is now ₹25 lakh, one-fourth of the earlier ₹1 crore and one-hundredth of the ₹25 crore tier (SEBI, 2025b, 2025d). This brings new fundraising within reach of investors who could already trade the same units in the secondary market, which is the gap the industry association had pointed to (SEBI, 2025b).

The evidence on whether this works is not yet available. The trading data in Table 1 are for March 2025, six months before the change, so they show the starting point and not the result. Mutual fund participation gives another reference point: ₹5,409 crore in InvITs is about 0.08% of the industry’s ₹66 lakh crore (calculated from SEBI, 2025a). Whether a lower threshold raises participation and trading in thinly traded private InvITs will only show in later data.

Emerging Issues

1. Liquidity remains uneven. The differences in trading values suggest that investors do not have the same ease of exit across all listed InvITs. More listings alone will not solve this problem.

2. Wider access must be balanced against risk. The lower primary-market threshold for privately placed InvITs broadens participation, but it does not remove the risks associated with construction delays, leverage or uncertain cash flows. SEBI kept a ₹25 lakh floor because these trusts suit sophisticated investors (SEBI, 2025b). Investor eligibility and risk disclosures remain important.

3. Institutional participation is limited. Mutual fund exposure to InvITs was considerably lower than exposure to REITs in March 2025. The figures establish a difference, but further evidence is needed to determine how much is explained by liquidity, investment mandates or risk perceptions.

4. The classification of InvITs requires care. Infrastructure assets vary widely. A highway dependent on traffic volumes may have a different risk profile from a transmission network operating under a regulated arrangement. Retaining the hybrid classification recognises that these trusts cannot all be treated as conventional equity investments.

Way Forward

SEBI has kept revising the InvIT framework since the 2025 changes. A consultation paper dated February 5, 2026 proposed four measures for InvITs and REITs, and SEBI’s Board approved them on March 23, 2026 (SEBI, 2026a, 2026b). Each should be checked against SEBI’s final notification before it is described as in force. The change on borrowings, for example, was made through an amendment to Regulation 20(3)(b)(ii) on April 17, 2026 and followed by a circular on May 15, 2026 (SEBI, 2026c).

1. Investment in special purpose vehicles after concession expiry. An InvIT usually holds each road, transmission or similar asset through an SPV that operates under a concession agreement. When the concession ends or is terminated, the SPV may still have to meet statutory, contractual, tax or litigation obligations, and the InvIT may not be able to sell its stake straight away (SEBI, 2026a). The approved change lets an InvIT keep holding such an SPV for one year, counted from the latest of three events: completion of the concession agreement, conclusion of pending claims, or expiry of the defect liability period. Within that window the InvIT must exit the SPV or acquire a new infrastructure project in it, and it must disclose its investment in the SPV in its annual report (SEBI, 2026b). The measure removes a practical difficulty. Its effect will show in how many InvITs use the window and how quickly they exit.

2. Wider investment options for liquid funds. REITs and InvITs may hold surplus cash in liquid assets, which include units of liquid mutual fund schemes. Only schemes with a very high credit risk value in the Class A-I risk class qualified, so the trusts had few schemes to choose from and their cash was concentrated in a handful of funds (SEBI, 2026a). Under the approved change, they can invest in liquid schemes with a credit risk value of at least 10 that fall in Class A-I or Class B-I of SEBI’s potential risk class matrix, which brings in schemes holding AA-rated and above instruments and not only the highest-rated ones (SEBI, 2026b). The trade-off is a small rise in the credit risk that idle cash can carry, in return for wider choice and less concentration.

3. Review of greenfield investment rules. SEBI has aligned certain investment conditions for privately listed InvITs with those applicable to publicly listed InvITs, allowing private InvITs to invest in greenfield infrastructure projects up to 10% of asset value (SEBI, 2026a, 2026b). The June 2025 memorandum says privately placed InvITs earlier faced no limit on investment in projects under construction (SEBI, 2025b), so what the 10% cap changes in practice depends on the final notification.

4. Permitted use of borrowings. For InvITs whose net borrowings exceed 49% of asset value, fresh borrowings were earlier allowed only for acquisition or development of projects. For InvITs with leverage between 49% and 70% of asset value, they can now also fund capital expenditure, major maintenance, particularly on road projects, and refinancing of existing debt (SEBI, 2026b, 2026c).

These changes form part of SEBI’s wider review of the REIT and InvIT framework. A further consultation paper on ease-of-doing-business measures for REITs and InvITs was published on August 6, 2026. The status of each proposal should be checked against later SEBI decisions and notifications before it is described as a completed reform.

References

Securities and Exchange Board of India. (2025a, September). Amendments to the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, for facilitating enhanced participation of mutual funds in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) [Board memorandum]. https://www.sebi.gov.in/sebi_data/meetingfiles/sep-2025/1758696920961_1.pdf

Securities and Exchange Board of India. (2025b, June). Measures towards ease of doing business for Infrastructure Investment Trusts and Real Estate Investment Trusts [Board memorandum]. https://www.sebi.gov.in/sebi_data/meetingfiles/jun-2025/1750844608452_1.pdf

Securities and Exchange Board of India. (2025c, November 28). Reclassification of Real Estate Investment Trusts (REITs) as equity related instruments for facilitating enhanced participation by mutual funds and Specialized Investment Funds (SIFs) [Circular]. https://www.sebi.gov.in/legal/circulars/nov-2025/reclassification-of-real-estate-investment-trusts-reits-as-equity-related-instruments-for-facilitating-enhanced-participation-by-mutual-funds-and-specialized-investment-funds-sifs-_98031.html

Securities and Exchange Board of India. (2025d, September 1). Securities and Exchange Board of India (Infrastructure Investment Trusts) (Third Amendment) Regulations, 2025 (SEBI/LAD-NRO/GN/2025/259). https://www.sebi.gov.in/legal/regulations/sep-2025/securities-and-exchange-board-of-india-infrastructure-investment-trusts-third-amendment-regulations-2025_96437.html

Securities and Exchange Board of India. (2026a, February 5). Consultation paper on measures towards ease of doing business for REITs and InvITs. https://www.sebi.gov.in/reports-and-statistics/reports/feb-2026/consultation-paper-on-measures-towards-ease-of-doing-business-for-reits-and-invits-_99545.html

Securities and Exchange Board of India. (2026b, March 23). [ Key decisions taken in the SEBI Board Meeting of March 23, 2026]. https://www.sebi.gov.in/media-and-notifications/press-releases/mar-2026/key-decisions-taken-in-the-sebi-board-meeting-dated-23rd-march-2026_100515.html

Securities and Exchange Board of India. (2026c, May 15). [Circular] https://www.sebi.gov.in/legal/circulars/may-2026/permitted-use-of-fresh-borrowings-for-invits-where-net-borrowings-exceeds-forty-nine-percent-of-the-value-of-invit-assets_101465.html

About the Contributor

Sudeepti Joshi is a second-year B.A. (Hons.) Economics student at Dayal Singh College, University of Delhi. Her academic and research interests include economics, public policy, development and institutional finance.

Reviewers

Aditya Chavan and Siddhant Koul