SEBI has introduced a new framework allowing REITs and InvITs to issue foreign currency-denominated depository receipts on exchanges at GIFT City. This move aims to tap global capital while restricting participation to non-residents. Additionally, the regulator has shortened the cooling-off period for privately listed InvITs to 8 weeks, a step intended to improve market liquidity for these trusts.
On November 2, 2026, the Securities and Exchange Board of India (SEBI) announced a regulatory framework that permits Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to raise capital by issuing depository receipts. These instruments, which will be denominated in foreign currency, are set to be listed on international exchanges located within the GIFT City International Financial Services Centre (IFSC), specifically the India International Exchange and the NSE International Exchange.
Opening Global Capital Pathways
The core intent of this change is to widen the capital base for Indian infrastructure and real estate assets by allowing access to global investors. By listing these receipts in the IFSC, the regulator creates a dedicated channel for foreign entities and non-resident Indians to gain exposure to Indian assets, bypassing the limitations often associated with domestic equity market participation.
To protect existing unitholders, the regulator has mandated strict compliance and governance measures. Any fresh issuance of these depository receipts will require approval from at least 75 percent of the trust’s unitholders. Furthermore, the framework explicitly excludes Indian residents from holding these receipts, ensuring the channel is used exclusively for cross-border investment. The regulator has also imposed restrictions to prevent individuals identified as fugitive economic offenders or wilful defaulters from participating in these offerings.
Improving Liquidity for Private Trusts
In a simultaneous development focused on the domestic market, SEBI has amended the rules for privately listed InvITs. The cooling-off period for offer-for-sale transactions in units that are considered illiquid has been reduced from 12 weeks to eight weeks. Privately listed InvITs often face challenges regarding liquidity because of their larger lot sizes and institutional investor focus. By shortening this waiting period, the regulator aims to improve the ease of exit for existing investors and enhance the overall efficiency of the secondary market for these trusts.
While these updates provide new avenues for capital and liquidity, investors should remain aware of certain complexities. The GIFT City ecosystem is still in an early phase of development, and the tax implications of these depository receipts may vary depending on the investor’s tax residency. Additionally, while the liquidity rule change is a positive step, the fundamental market risks associated with real estate and infrastructure projects—such as interest rate sensitivity and project execution timelines—remain key factors that drive the performance of REITs and InvITs. Market participants will likely track how these trusts utilize the new global funding route and whether it leads to a measurable increase in capital inflow over the coming quarters.