SEBI eyes index inclusion for REITs to boost liquidity, investor participation, says chairman Pandey

SEBI chairman Tuhin Kanta Pandey

SEBI Chairman Tuhin Kanta Pandey on Friday said the markets regulator is actively examining the inclusion of REITs in market indices through a calibrated glide path -- a move that could materially improve liquidity, visibility, and institutional participation in these instruments.

The proposed index entry marks the most significant policy signal yet for India’s nascent REIT market, which the regulator believes must play a far larger role in funding the country’s long-term infrastructure needs.

Speaking at an event in New Delhi, Pandey said that enhancing market access and liquidity for REITs and InvITs is now a priority. India is already the fourth-largest REIT market in Asia, but depth remains limited: retail penetration is just 1 percent, and domestic REITs and InvITs still lack sufficient liquidity. As of October, the combined AUM of these vehicles stood at Rs 9.25 trillion, spread across 24 listed InvITs and multiple listed REITs.

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The SEBI chief said that the next phase of India’s infrastructure build-out must increasingly be financed through capital markets, with REITs and InvITs playing a central role. NabFiD estimates that India will require Rs 700 trillion of investment in core sectors by 2047, driven by rising power demand and expanding urban transport systems.

Pandey said SEBI is working closely with the finance ministry and state governments to accelerate public asset monetisation. Public-sector entities such as NHAI, which are not listed, can more easily bring InvITs to market, he added. Capital raising through IPOs and rights issues will also continue to be simplified.

While governance and investor protection remain non-negotiable, Pandey said wider adoption will also require better communication. Investor surveys show that people prefer information in languages they understand, and hence the need for more accessible outreach.

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