SEBI sets framework for infrastructure investment trust depository receipts in India’s International Financial Services Centre

The Securities and Exchange Board of India (SEBI) has issued an immediately effective framework for foreign currency denominated depository receipts (DRs) backed by units of infrastructure investment trusts (InvITs). This implements the InvIT component of the board’s September 2026 approval to enable DRs on real estate and infrastructure investment trust units. Receipts may be backed by newly issued units or units transferred by existing unitholders, but must be listed on India International Exchange or NSE International Exchange in India’s International Financial Services Centre. DR holders and their beneficial owners must be persons resident outside India. Fresh DR issues generally require unitholder approval by at least 75% of votes cast, with exceptions for a simultaneous initial offer and subsequent offerings within a previously approved overall limit. Where existing units back a fresh DR listing, all existing unitholders must have an opportunity to tender. Underlying units cannot be issued or transferred below the price applicable to the corresponding domestic issuance. Investment managers must appoint a merchant banker to oversee compliance and maintain minimum public unitholding, treating units backing DRs as nonpublic holdings. Domestic holdings and units underlying DRs must be aggregated for applicable holding limits, including holdings of persons acting in concert where required. Public disclosures on the international exchanges must also be filed with domestic exchanges within 24 hours. Any voting rights attached to underlying units must be exercised through the foreign depository solely on the DR holder’s instructions.