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Mumbai: In a significant regulatory reform, the Securities and Exchange Board of India (SEBI) has announced changes to the minimum allotment size for privately placed Infrastructure Investment Trusts (InvITs), reducing it to ₹25 lakh in the primary market. This move brings the allotment threshold in line with the existing lot size in the secondary market, creating uniformity across both platforms.
Until now, the minimum allotment for privately placed InvITs in the primary market ranged between ₹1 crore and ₹25 crore, depending on the asset composition of the trust. The high entry point restricted access largely to institutional investors, high-net-worth individuals (HNIs), and large corporates. By lowering this limit to ₹25 lakh, SEBI has effectively opened the door to a broader range of investors, particularly family offices, smaller HNIs, and sophisticated retail participants seeking exposure to India’s infrastructure growth story.
Why This Matters
The decision is expected to broaden investor access to infrastructure as an asset class. India has been witnessing a steady rise in the popularity of InvITs and REITs (Real Estate Investment Trusts) due to their attractive investment profile. These instruments provide stable, predictable, and often inflation-linked returns by pooling income-generating assets such as highways, power transmission networks, and commercial office properties.
“SEBI’s decision to reduce the minimum investment threshold in privately placed InvITs and REITs to ₹25 lakh is a progressive move that will reshape investor access. Earlier, participation was largely restricted to institutional investors with minimums ranging from ₹1 crore to ₹25 crore, limiting market depth and liquidity. Aligning the primary market with the secondary market lot size creates a more harmonized, accessible framework that can widen the investor base,” said Manav Agarwal, Chief Data and Operations Officer at NK Realtors.
The Bigger Picture: Infrastructure Push in India
India’s infrastructure sector is at the heart of its economic growth ambitions. With initiatives such as the National Infrastructure Pipeline (NIP) and the government’s push towards privatization of public assets, InvITs have emerged as a crucial financing vehicle.
By lowering entry barriers, SEBI aims not just to democratize access, but also to channel domestic capital into long-term infrastructure projects that require consistent funding. Traditionally, such projects relied heavily on banks and large institutions, but with InvITs gaining popularity, retail and smaller HNI investors can now participate in India’s growth story while earning steady yields.
InvITs and REITs also help unlock capital for developers. By monetizing existing income-generating assets, companies free up resources to reinvest in new projects, ensuring a cycle of growth. This model has already gained traction with several successful InvIT launches in the road, power transmission, and renewable energy sectors.
Benefits for Investors
The reduction in the minimum allotment size from crores to lakhs offers multiple benefits:
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Accessibility: Investors who were previously priced out can now participate with a relatively smaller capital outlay of ₹25 lakh.
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Diversification: InvITs provide exposure to infrastructure and real estate, which are not directly available through traditional equity or debt instruments.
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Stable Returns: These instruments typically provide consistent returns backed by long-term contracts and regulated cash flows.
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Inflation Hedge: Many InvITs and REITs offer inflation-linked returns, making them attractive in today’s uncertain economic climate.
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Liquidity: With harmonization across primary and secondary markets, investors can enjoy more seamless entry and exit options.
Industry Response
Market experts view SEBI’s reform as a forward-looking step that balances investor protection with market development. While lowering the threshold makes the asset class more inclusive, the ₹25 lakh minimum ensures that only investors with sufficient financial capacity and understanding of the risks participate.
“This move strikes the right balance,” noted a fund manager at a leading asset management company. “By setting ₹25 lakh as the benchmark, SEBI avoids the pitfalls of over-retailization while still allowing a much wider pool of investors to benefit from the stable yields of InvITs. This will deepen liquidity and broaden participation, which in turn should improve pricing efficiency.”
Challenges to Watch
While the move is widely welcomed, experts caution that investor education will be key. InvITs and REITs, despite their attractive features, come with certain risks such as regulatory changes, operational challenges, and interest rate fluctuations.
Moreover, the performance of these instruments depends heavily on the quality of assets, governance standards, and the ability of managers to generate consistent cash flows. As more investors gain access, regulators and issuers alike will need to ensure transparency, disclosure, and risk awareness remain top priorities.
Conclusion
SEBI’s decision to lower the entry barrier for privately placed InvITs to ₹25 lakh is a landmark reform in India’s investment landscape. It harmonizes primary and secondary markets, democratizes access to infrastructure investments, and creates opportunities for a wider base of investors to participate in one of India’s fastest-growing asset classes.
At a time when the demand for stable, yield-generating instruments is rising, InvITs and REITs are set to play an increasingly important role in mobilizing capital for India’s infrastructure ambitions. For investors, this reform opens up a new avenue of wealth creation aligned with the nation’s growth trajectory.
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