Infrastructure Investment Trusts in India: Structuring, SEBI Regulation, and the InvIT as a Capital Markets Instrument

Infrastructure Investment Trusts (InvITs) have established themselves as one of the most significant structural innovations in India's capital markets over the past decade. Designed to bridge the long-term capital requirements of infrastructure assets with the liquidity and distributional expectations of institutional and retail investors, InvITs provide a trust-based vehicle through which infrastructure project revenues are securitised and listed on recognised stock exchanges. As of February 2026, twenty-four InvITs are listed on Indian exchanges, with aggregate assets under management of approximately Rs. 9.5 lakh crore – a figure that reflects the instrument's growing importance as a mechanism for recycling public and private capital into new infrastructure from mature operating assets. This blog examines the regulatory framework for InvITs under the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (InvIT Regulations), as recently amended by the SEBI (InvIT) Amendment Regulations, 2026, and evaluates the InvIT as a structuring, financing, and investment tool in the context of India's National Infrastructure Pipeline and global comparable instruments. This blog contends that the 2026 SEBI reforms represent a meaningful improvement in the InvIT's commercial viability, but that further reforms to the framework governing cross-border unitholding and distribution flexibility would strengthen the instrument's appeal to global institutional capital.

The InvIT Structure: Architecture and Regulatory Design

An Infrastructure Investment Trust is a statutory trust constituted under the Indian Trusts Act, 1882, registered with SEBI under the InvIT Regulations. The InvIT structure involves four principal parties: the Sponsor (the infrastructure developer or project company that transfers assets into the InvIT); the Investment Manager (the entity responsible for investment decisions and management of the InvIT's portfolio, registered with SEBI); the Project Manager (the operating entity responsible for managing the underlying infrastructure projects); and the Trustee (an independent registered trustee responsible for fiduciary oversight).¹ The InvIT holds the infrastructure assets – either directly or through special purpose vehicles (SPVs) – and distributes at least ninety per cent of the distributable net cash flows to unitholders on a semi-annual basis.

The InvIT's investment mandate is confined to infrastructure projects as defined in the InvIT Regulations. Eligible infrastructure sectors include roads and highways, power transmission lines, gas pipelines, renewable energy generation assets, telecom towers, logistics and warehousing facilities, and water infrastructure. The concentration requirement – that at least eighty per cent of the InvIT's value be invested in completed and revenue-generating assets, with no more than twenty per cent invested in under-construction assets – ensures that the InvIT's cash distribution capability is grounded in operating assets rather than development-stage projects.

The InvIT may be structured as either a publicly listed InvIT – available to all SEBI-registered investors, including retail investors – or a privately placed InvIT, available only to institutional investors and high net worth investors, with a lower minimum offeringsize. The publicly listed InvIT requires a minimum unitholding of Rs. 1 lakh per lot for subscription at IPO and has a minimum float requirement. The privately placed InvIT, introduced by SEBI's 2016 amendment to provide a more flexible structure for early-stage infrastructure monetisation, operates with lighter disclosure obligations and a minimum investment value of Rs. 1 crore.

The 2026 SEBI Amendments: EODB Reforms and New Compliance Pathways

The SEBI (InvIT) Amendment Regulations, 2026, notified on 18 April 2026 pursuant to the SEBI Board's resolutions at its 213th meeting held on 23 March 2026, introduce a set of Ease of Doing Business (EODB) reforms designed to reduce the regulatory friction associated with InvIT listing execution, asset acquisition, and unitholder communication.²

The principal reforms introduced by the 2026 amendments include: a simplified approval process for InvIT unit issuances that are routine and below a prescribed threshold; a relaxation of the continuous offer mechanism requirements for privately placed InvITs; the introduction of electronic unitholder communication as the default mode, replacing mandatory physical communications; and amendments to the governance provisions governing related-party transactions between the InvIT and its Sponsor, Investment Manager, or their affiliates.

The related-party transaction amendments are of particular significance for InvIT governance. The pre-amendment framework required unitholder approval for related-party transactions exceeding a prescribed threshold on a transaction-by-transaction basis, creating an approval burden that, for large infrastructure platforms undertaking iterative asset acquisitions from Sponsor-affiliated project companies, imposed material execution delays. The 2026 amendments streamline the approval framework by permitting an omnibus related-party transaction approval mechanism for routine transactions meeting prescribed conditions – an approach consistent with the omnibus approval mechanism introduced into the Companies Act, 2013 for corporate related-party transactions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Asset Monetisation and the InvIT's Role in the National Infrastructure Pipeline

The InvIT is a central instrument of India's asset monetisation strategy. The National Asset Monetisation Pipeline (NAMP), launched by the Ministry of Finance in August 2021, identified a potential Rs. 6 lakh crore of monetisable public-sector infrastructure assets across roads (NHAI and MoRTH), power transmission (Power Grid), gas pipelines (GAIL, IOCL), railways (RLDA), airports (AAI), and telecom (BSNL and BharatNet) over the four-year period to 2025.³ InvITs have been the principal vehicle for NAMP execution in the road and power transmission sectors, with NHAI InvIT and PowerGrid Infrastructure Investment Trust representing the two sovereign-affiliated InvITs that have absorbed the largest volumes of public-sector asset monetisation to date.

The InvIT's structural advantage in the asset monetisation context is its ability to provide a competitive, liquid, and transparent market price for infrastructure assets that might otherwise be monetised through bilateral private transactions at negotiated prices. The InvIT's unitholding structure enables the Sponsor (including public-sector entities) to retain a continuing economic interest in the asset while achieving regulated market disclosure and price discovery. SEBI's governance requirements – including the quarterly distribution floor, the independent trustee, and the unitholder approval mechanism – provide investor protection that bilateral sale structures do not.

The NAMP's performance in the road and power transmission sectors demonstrates that the InvIT is a viable instrument for large-scale public-sector asset recycling. The extension of the InvIT model to additional asset classes – urban infrastructure, water and sanitation, digital infrastructure – would require adaptation of the InvIT Regulations' asset eligibility framework, and SEBI has signalled its willingness to consider expansion through the regulatory sandbox and consultation processes.

Debt Financing of InvITs: Security, Leverage, and IBC Interface

InvITs are permitted to borrow, subject to a leverage ratio cap prescribed in the InvIT Regulations. The InvIT Regulations cap the aggregate consolidated borrowings of an InvIT (including its SPVs) at forty-nine per cent of the value of the InvIT's assets, as determined by the most recent independent valuation.⁴ Debt may be raised at the InvIT level, at the SPV level, or both. The structural subordination of InvIT-level debt to SPV-level project finance creates a layered security architecture that lenders and investors must evaluate carefully.

The security architecture for InvIT debt typically includes a pledge of the InvIT's units in the SPVs; an assignment of the SPV's receivables (infrastructure revenues, concession revenues, or tolls) by way of security; a charge on the SPV's project assets; and a corporate guarantee or keepwell commitment from the Sponsor or Investment Manager. The enforcement of security over project assets in an infrastructure context engages the regulatory framework of the relevant sector – for road concessions, the NHAI Model Concession Agreement; for power transmission, the Central Electricity Regulatory Commission framework – and requires lender consent mechanisms to be aligned with the concession agreement's change of control and lender substitution provisions.

The interface between InvIT distress and the Insolvency and Bankruptcy Code, 2016 (IBC) presents a complex analytical question. The IBC's corporate insolvency resolution process applies to corporate persons, including companies and limited liability partnerships. An InvIT is a trust, not a corporate person, and the IBC framework does not directly govern InvIT insolvency. The winding up of an InvIT is governed by the InvIT Regulations and the terms of the trust deed.

Global Comparisons: Singapore's Business Trust Regime and UK Infrastructure Funds

Singapore's Business Trust Act 2004 provides the closest comparable regulatory framework to India's InvIT regime. Business trusts in Singapore may list on the Singapore Exchange (SGX) and are used to hold infrastructure, logistics, and utility assets in structures that share the InvIT's trust-based architecture and distributional characteristics. SGX-listed business trusts include Keppel Infrastructure Trust, Hutchison Port Holdings Trust, and Japan Foods Holding.

The UK's closed-ended investment company (CEIC) structure, used by listed infrastructure investment companies such as the HICL Infrastructure Company, 3i Infrastructure plc, and the International Public Partnerships fund, provides an alternative corporate architecture for listed infrastructure investment. UK-listed infrastructure investment companies operate under the Financial Conduct Authority's Listing Rules and the Investment Company Act 2006 (IC Act), without a prescribed leverage cap equivalent to the InvIT Regulations' forty-nine per cent limit. The comparative absence of regulatory leverage restriction in the UK model reflects the UK's disclosure-based approach to investor protection, in contrast to India's more prescriptive structural framework.

Conclusion

India's InvIT framework has matured into an internationally credible vehicle for infrastructure asset monetisation and capital formation. This blog has argued that the 2026 SEBI amendments' EODB reforms – particularly the related-party transaction omnibus approval mechanism – represent meaningful improvements to execution efficiency. The NAMP's deployment of InvITs for public-sector asset recycling demonstrates the instrument's macro-economic utility, and the instruments' AUM trajectory reflects growing institutional acceptance. Further reforms to the cross-border unitholding framework – to reduce the regulatory complexity facing foreign institutional investors seeking InvIT exposure – and to the distribution flexibility provisions would materially strengthen the InvIT's position as a preferred infrastructure investment vehicle in a global portfolio context.

Endnotes

¹ SEBI (Infrastructure Investment Trusts) Regulations 2014 (India), Regulation 2 (definitions of sponsor, investment manager, project manager, and trustee).

² SEBI (Infrastructure Investment Trusts) (Amendment) Regulations 2026 (India), notified 18 April 2026.

³ Ministry of Finance (India), 'National Asset Monetisation Pipeline' (23 August 2021).

⁴ SEBI (Infrastructure Investment Trusts) Regulations 2014 (India), Regulation 18 (leverage cap of 49% of asset value).

⁵ SEBI (Infrastructure Investment Trusts) Regulations 2.