SEBI eases REIT, InvIT rules on unitholder approvals, sponsor exits

According to fresh market updates, The Securities and Exchange Board of India (SEBI) has eased rules for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), including changing the threshold for unitholder approval and providing greater flexibility around sponsor exits.

The SEBI Board approved amendments to the REIT and InvIT regulations to change the approval threshold for certain matters from 75% of all outstanding units to 75% of the total votes cast.

SEBI stated securing the earlier threshold had become difficult because of diverse ownership and non-participation by some unitholders. The revised threshold is aligned with the Firms Act, 2013, where such thresholds are based on votes cast on a resolution.

SEBI has additionally clarified the framework for exit offers when there is a change in sponsor. In cases where one of multiple sponsors exits while the other sponsors continue, the exit offer can now be made either by the outgoing sponsor or its group entities, or by the continuing sponsor or its group entities.

The regulator has additionally narrowed the definition of “dissenting unitholders”. Under the revised framework, only unitholders who vote against a resolution will be treated as dissenting unitholders. Those who do not vote will no longer be counted as dissenting.

Unitholder notices will have to explicitly state that the exit option, where applicable, will be available only to unitholders who vote against the resolution.

SEBI has additionally provided that all units tendered under an exit offer must be accepted. At present, units are accepted proportionately to ensure that minimum public unitholding (MPU) is maintained after the offer, which can limit the ability of dissenting unitholders to make a complete exit.

If an exit offer causes the REIT or InvIT's public unitholding to decline below the prescribed minimum, the trust will have one year from completion of the exit offer to restore compliance. Remote common infrastructure

Separately, SEBI has amended the definition of “real estate” or “property” under the REIT framework to include remote common infrastructure.

The existing definition covered common infrastructure in composite real estate projects, which meant common infrastructure located away from the project did not qualify as real estate. SEBI stated the change is intended to promote environmental sustainability and enable REITs to recognise such infrastructure within the real estate framework.

The amendments follow recommendations of SEBI's Hybrid Securities Advisory Committee and feedback received during the public consultation conducted through a consultation paper issued on August 6, 2026.