Sebi proposes adding QIBs and FPIs in strategic investor category for REITs, InvITs

Market regulator Securities and Exchange Board of India (SEBI) has proposed allowing foreign investors and qualified institutional buyers (QIBs) to participate as strategic investors in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The proposal is expected to boost capital inflows into these sectors.

In its consultation paper issued on Friday, SEBI said “In order to widen the investor base for applying under the Strategic Investor category in a public issue of units of REITs and InvITs, and to promote ease of doing business by enabling REITs and InvITs to attract capital from more investors under the Strategic Investor category, it is proposed to amend the definition of Strategic Investor to provide that an entity who is considered a QIB under the ICDR Regulations may apply as a Strategic Investor.”

The consultation paper further stated: “It is noted that Foreign Portfolio Investors (FPIs) who are individuals, corporate bodies or family offices are not classified as QIBs under the ICDR Regulations. The same approach can be considered for FPIs regarding inclusion under the Strategic Investor category in the REIT and InvIT Regulations. Hence, it is proposed that FPIs who are individuals, corporate bodies or family offices shall not be considered under the Strategic Investor category.”

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