SEBI Allows REITs And InvITs To Raise Overseas Funds Through Depository Receipts; Sets 75% Unitholder Approval Rule

The Securities and Exchange Board of India (SEBI) has introduced a framework allowing real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) to raise funds from overseas investors through depository receipts (DRs). The receipts will be backed by units of the trusts and can be listed on international exchanges in GIFT City.

The framework was announced on 2 November 2026. It aims to widen access to foreign capital for India’s real estate and infrastructure investment vehicles.

Depository Receipts To Be Listed On Gift City Exchanges

Under the framework, REITs and InvITs can issue fresh units or facilitate the transfer of existing units held by unitholders to create DRs. These foreign currency-denominated instruments will be issued by a foreign depository against securities held with a domestic custodian in India.

The DRs can be listed on specified international exchanges at GIFT City’s International Financial Services Centre (IFSC). These include India International Exchange (India INX) and NSE International Exchange.

The framework was proposed in August 2026 to attract additional foreign investment. SEBI’s board approved it in September 2026.

75% Approval Required For Fresh Issues

Any fresh issue of DRs will require prior approval from unitholders, with at least 75% of votes cast in favour of the proposal. This approval requirement will not apply to an initial domestic offer and listing carried out alongside a simultaneous DR issue. It will also not apply to subsequent DR offerings within an overall limit already approved by unitholders.

If existing unitholders transfer units to support a DR issue, the REIT or InvIT must provide all existing unitholders an opportunity to tender their units.

SEBI has also set eligibility conditions for participating trusts and related parties. DR holders, including their beneficial owners, cannot be residents of India. Units underlying DRs cannot be priced below the price applicable to the corresponding domestic offering.

The framework also requires disclosures made by REITs and InvITs on international exchanges to be filed with recognised Indian stock exchanges within 24 hours. Domestic custodians must maintain records of DR issuance and cancellation transactions and report them to Indian depositories.

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