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Budget 2023
Budget 2023

REITs and InvITs: Paving the way for a new era of investments

On July 30, markets regulator Sebi reduced the minimum application value of REITs and InvITs, and revised trading lot to one unit for these emerging investment instruments to make them attractive for retail investors.

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) now constitute a new asset class available for investors, allowing investors to invest in completed real estate and infrastructure assets with a low ticket size and adequate liquidity.

On July 30, markets regulator Securities and Exchange Board of India (SEBI) reduced the minimum application value of REITs and InvITs, and revised trading lot to one unit for these emerging investment instruments to make them attractive for retail investors.

Last month, the minimum application value for retail investors of REITs and InvITs was reduced by SEBI within the range of Rs 10,000-15,000 (from Rs 50,000 for REIT and Rs 1 lakh for InvITs) at the time of listing with a revised minimum trading lot of one unit. The move is expected to enhance the liquidity of the asset class in addition to providing the depth to the market.

REITs allow pooling of money from multiple investors into a single trust which is professionally managed by a manager and invests in immovable and rent yielding properties or special purpose vehicles (SPVs) holding such kind of properties.