SEBI Amends InvIT Rules: Depository Receipts Allowed, Unitholder Approval Threshold Changed
The Securities and Exchange Board of India (SEBI) has amended the rules governing Infrastructure Investment Trusts (InvITs), allowing depository receipts to be issued on InvIT units and changing how unitholder approvals are counted for certain decisions.
The SEBI (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2026, notified on 12 October 2026, amend the SEBI (Infrastructure Investment Trusts) Regulations, 2014, which govern the establishment and operation of InvITs in India. The amendments came into force on 14 October.
A new provision, Regulation 14(5C), permits depository receipts to be issued on units of an InvIT, subject to compliance with the regulations and in the manner specified by SEBI. Until now, the regulations did not expressly provide for the issuance of depository receipts on InvIT units.
The amendment also changes the approval threshold for certain significant transactions and matters. Earlier, approval was required from 75 per cent of unitholders by value. Under the revised Regulation 22(5A), a resolution will be considered approved if at least 75 per cent of the total votes cast are in favour. The test thus shifts from ownership value to voting participation and outcome.
Similar changes apply to related-party matters. Under Regulation 22(5C), approval earlier required 75 per cent of unitholders by value, excluding related parties. Now, approval will be obtained where votes cast in favour constitute at least 75 per cent of the total votes cast, excluding votes cast by parties related to the transaction. Regulation 22(7)(a) has been amended in the same way, replacing the by-value threshold with one based on at least 75 per cent of total votes cast in favour, excluding votes cast by related parties. The related-party exclusions continue, but the threshold now depends on votes cast rather than unitholding value.
A new provision, Regulation 22(7)(b)(iv), provides an exit option for dissenting unitholders when a sponsor exits an InvIT with multiple sponsors. In such a case, the outgoing sponsor or its sponsor group entities, or any continuing sponsor or its sponsor group entities, must give dissenting unitholders the option to exit by purchasing their units in the manner specified by SEBI.
SEBI said the amendments are meant to facilitate broader market participation, align voting requirements with a votes-cast framework, and strengthen investor protection during sponsor exits. The changes introduce both market-development and investor-protection measures, potentially widening investor access and participation in InvITs, while enhancing safeguards for minority unitholders.
Source: SCC Times