India proposes to widen institutional investment in REITs and InvITs

India's markets regulator on Friday proposed allowing foreign investors and qualified institutional buyers to participate as strategic investors in Real Estate Investment Trusts and Infrastructure Investment Trusts, a move aimed at boosting capital inflows into these sectors, reports Reuters.

Strategic investors receive allocation before an issue opens, and are required to invest at least 5 per cent and up to 25 per cent of the total offer size in REITs and InvITs.

The Securities and Exchange Board of India said that the current definition of strategic investors is narrow and does not include investors including public financial institutions, insurance funds, provident funds, and pension funds, which also invest in units of REITs and InvITs.

This results in REITs and InvITs being unable to attract capital from them as strategic investors, SEBI said.

The regulator, in a consultation paper, said that foreign investors, except individuals, body corporates and family offices, can invest as strategic investors.

SEBI has sought comments on the proposals by August 22.