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India’s market regulator is moving ahead to include real estate investment trusts (Reits) in benchmark indices in a phased manner, Sebi chief Tuhin Kanta Pandey said, while asserting that the regulator was working to strengthen the link between infrastructure building and the markets.
Illustration: Dominic Xavier/Rediff
“Sebi will work with all stakeholders to facilitate the inclusion of Reits in indices, through an appropriate glide path,” Pandey said at the National Conclave on Reits and Invits in New Delhi on Friday.
The Securities and Exchange Board of India (Sebi) chairman also said that the National Monetisation Pipeline’s next tranche will be Rs 10 trillion over five years, higher than the Rs 6 trillion outlined for monetisation in the first five-year tranche.
“We are coordinating with the Ministry of Finance and several state governments to accelerate public-asset monetisation.
We are working with the Insurance Regulatory and Development Authority of India (Irdai), Pension Fund Regulatory and Development Authority (PFRDA), and Employees’ Provident Fund Organisation (EPFO) to facilitate greater participation from their entities under their purview,” Pandey said.
The Sebi chief also said that a move was afoot to expand the pool of liquid mutual fund schemes, which would also help Reits and infrastructure investment trusts (Invits).
The government is adopting different models for asset monetisation, including Invits and public-private partnerships (PPP).
He described Reits and Invits as the “central bridge” between infrastructure and capital markets.
Earlier this month, Sebi amended mutual fund regulations to explicitly classify Reit units as eligible equity investments, allowing MFs to diversify further by investing directly in them.
Experts say this change also opens the door for Reits to enter equity indices.
“Inclusion in indices will enable index funds to invest in Reits which qualify into the indices thereby attracting passive flows into these instruments.
“This is a very positive policy reform which will help Reits access passive money and better the liquidity in these instruments,” said Preeti Chheda, executive committee member of the Indian REITs Association and chief financial officer of Mindspace Business Parks REIT.
India currently has five listed Reits with market capitalisation ranging from Rs 21,000 crore to Rs 52,700 crore.
According to analysts, Knowledge Realty Trust Reit, the largest of them, could soon qualify for inclusion in indices such as the Nifty Smallcap 100 or Nifty Real Estate.
The regulator would also be open to the idea of under construction assets being included in a Reits portfolio, but that would have to be done with appropriate guardrails, possibly on a percentage share basis, the chairman said on the sidelines but did not elaborate further.
Pandey added that the markets regulator was exploring whether private Invits too may invest in greenfield projects with adequate safeguards.
“Municipal bonds and state-level Invits naturally complement this ecosystem.
“The recent announcement of the Maharashtra Government to create a Maharashtra Infrastructure Investment Trust is an important step in funding infrastructure at the state level,” he said.
He also highlighted the need for broader analyst coverage of Reits and Invits, which will flow into the larger goal of educating investors on participation in the instruments.
On the primary market side, Sebi will continue to simplify capital raising through IPOs, rights issues, QIPs, and bonds, Pandey added.
Pandey added that the regulator was already engaging with institutional investors to deepen the participation of institutional investors in REITs and Invits.
“We are coordinating with the Ministry of Finance and several state governments to accelerate public-asset monetisation.
“We are working with Irdai, PFRDA, and EPFO to facilitate greater participation from their entities under their purview,” Pandey added.
Insurance Regulatory and Development Authority of India (Irdai) is the insurance regulatory body under the ministry of finance, Pension Fund Regulatory and Development Authority (PFRDA) that regulates pension industry, while Employees’ Provident Fund Organisation (EPFO) administers pension schemes for employees in the organised workforce.
The Sebi chairman said that the regulator was evaluating further ease-of-doing-business measures for Reits and Invits for which it was holding discussions with industry stakeholders, underscoring the need for the access to these instruments to be democratised, which will indirectly give unitholders access to high value assets and deliver real, cash returns.
“Our expectations are clear. Governance and investor interests will be non-negotiable.
“Use your associations, your digital presence, and your networks to educate investors in multiple languages.
“With stronger benchmarking and disclosures, you can offer investors the transparency they need to stay invested,” Pandey added.
As of October 2025, the combined assets under management of Reits, Invits, and SM Reits is estimated at around Rs 9.25 trillion of which Rs 7 trillion was in Invits, Rs 2.25 trillion in Reits and SM Reits.
Highlighting that India will require massive investment across transport, energy, urban infrastructure, telecom, and aviation, Pandey said that India’s core sectors may require well over Rs 700 trillion in investment by 2047.
