SEBI Pushes for Greater Institutional & Retail Participation in REITs and InvITs

SEBI Pushes for Greater Institutional & Retail Participation in REITs and InvITs

At the National Conclave on REITs and InvITs 2025, SEBI Chairman Tuhin Kanta Pandey underscored a renewed push to deepen India’s investment ecosystem for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs).

With India rapidly scaling its real-estate and infrastructure ambitions, REITs and InvITs are emerging as critical financial instruments to channel long-term, stable capital into these sectors.

Boosting Institutional Participation

Pandey highlighted SEBI’s ongoing engagement with three major financial regulators and their regulated entities:

IRDAI (Insurance Regulatory and Development Authority of India)

PFRDA (Pension Fund Regulatory and Development Authority)

EPFO (Employees’ Provident Fund Organisation)

SEBI is coordinating with these institutions to encourage greater allocation of insurance funds, pension money, and provident fund contributions toward REITs and InvITs.

This marks a significant shift, as these entities manage some of India’s largest long-term pools of capital.

He also noted SEBI’s collaboration with the Ministry of Finance and state governments to accelerate public-asset monetisation, a key source of project pipelines for InvITs and REITs.

What is Public Asset Monetisation ?

Public asset monetisation means unlocking the economic value of government-owned assets—such as roads, railways, airports, power lines, land, buildings, pipelines—by allowing private or institutional investors to use, operate, or lease them for a fixed period in exchange for upfront money or revenue sharing.The government retains ownership, but the private sector helps operate and generate revenue from the asset.

Example

Example: Toll Road Monetisation

The government already has a completed national highway.

Instead of operating toll collection itself, the government leases the road to a private company for 20 years under a model like TOT (Toll-Operate-Transfer).

The private company pays a lump sum upfront—say ₹8,000 crore—to the government.

In return, the private company collects the tolls for the 20-year period.

After 20 years, the road comes back fully to the government.

This allows government to:

1. Get immediate funds for new infrastructure projects

2. Improve efficiency and maintenance through private management

3. Retain full ownership of the asset

Why Institutional Investment Matters?

REITs and InvITs hold income-generating assets such as office parks, highways, power grids, and logistics infrastructure. These vehicles share a major portion of their cash flows with investors, making them suitable for institutions seeking stable and predictable returns.

Impact on EPFO, PFRDA & IRDAI Participants

EPFO:Traditionally invests ~90% in debt and ~10% in equities.Exposure to REITs/InvITs can diversify and strengthen the retirement corpus with long-term, inflation-linked returns.

PFRDA:Pension funds can gain a stable income stream via dividend-like distributions and diversify beyond traditional fixed-income instruments.

IRDAI-regulated insurers:Can match long-term liabilities with steady cash-yielding infrastructure assets.

Large-scale institutional entry will also likely:

• Enhance liquidity in these instruments

• Bring pricing stability

• Improve investor confidence

• Encourage retail participation through lower volatility

Significance for Retail Investors

Retail investors have gradually warmed up to REITs and InvITs, but participation remains far below potential.SEBI’s latest push aims to:

Increase awareness

Strengthen market depth

Reduce price fluctuations

Build trust through institutional participation

With more pension and insurance money entering the ecosystem, retail investors may find these products more attractive for long-term wealth building.

A Step Toward National Infrastructure Growth

Pandey’s message aligns with India’s broader economic strategy:channel domestic savings into national-capacity building assets like commercial real estate, roads, bridges, energy transmission networks, and logistics hubs.

By expanding participation from EPFO, PFRDA, and IRDAI, SEBI aims to:

Mobilize long-term capital

Support infrastructure expansion

Provide stable income for investors

Drive sustainable economic growth

Conclusion

SEBI’s initiative is more than a regulatory push—it is a structural shift intended to transform how India funds its infrastructure and real-estate growth. Institutional involvement from EPFO, PFRDA, and IRDAI could unlock massive pools of capital, boost investor confidence, and strengthen the ecosystem for REITs and InvITs.

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