India’s market regulator has introduced a major shift in how mutual funds classify key investment vehicles. On Wednesday, SEBI Chairman Tuhin Kanta Pandey announced that Real Estate Investment Trusts (REITs) will now be treated as equity assets, while Infrastructure Investment Trusts (InvITs) will continue to fall under the hybrid category.
Pandey explained that both instruments were previously grouped together for mutual fund classification. With the new framework, REITs will move into the equity basket, reflecting their closer alignment with real estate ownership and market-linked returns, whereas InvITs will retain their hybrid status due to their infrastructure-focused and income-oriented structure.
The announcement was made during the National Conclave on REITs & InvITs 2025, hosted by the Bharat InvITs Association and the Indian REITs Association. Speaking at the event, Pandey emphasized that India must significantly scale up its REIT and InvIT ecosystem to support long-term infrastructure development.
He highlighted that these instruments serve as an essential link between capital markets and national infrastructure goals, helping convert household savings into long-term productive assets that fuel economic growth.
A Rapidly Expanding Market
According to Pandey, India currently has:
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5 listed REITs
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24 listed InvITs
These span sectors including commercial real estate, roads, renewable energy, transmission, telecom, and warehousing.
As of October 2025, the combined assets under management (AUM) of REITs, InvITs, and Small & Medium REITs have reached ₹9.25 trillion — a significant milestone, though still below what India requires to meet future infrastructure demands. Pandey noted that these products provide “real cash returns to unitholders” while offering access to large-scale, institutional-grade assets.
What Are REITs?
REITs (Real Estate Investment Trusts) are companies that own, manage, or finance income-producing real estate. Similar to mutual funds, they allow investors to buy units and earn returns from rental or commercial property performance — without needing to directly purchase or manage physical real estate.
What Are InvITs?
InvITs (Infrastructure Investment Trusts) are investment structures that pool capital to own and operate infrastructure assets such as highways, roads, power transmission projects, and renewable energy facilities. They offer investors steady income linked to long-term infrastructure revenue.
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