The Securities and Exchange Board of India amended the net distributable cash flow framework for infrastructure investment trusts, allowing payments for major maintenance of road projects to be added back when funded through external borrowing. The change applies to calculations at both the trust and holding company or special purpose vehicle level and takes immediate effect. The add-back requires approval for each project from unitholders representing at least 60% of votes cast and certification by the statutory auditor that the expenditure meets concession agreement requirements and was debt-funded. Approval may cover the project life cycle or specific expenditure, while additional debt beyond an approved proposal requires further approval. InvITs must disclose the borrowing’s effects on leverage and distributions, funding alternatives, project-level debt amounts and maturity profiles in meeting materials and periodic reports.
Securities & Exchange Board of India2026-08-14
Securities and Exchange Board of India allows InvITs to add back debt-funded road maintenance costs in distributable cash flow calculations
The Securities and Exchange Board of India will allow InvITs to add back externally funded major road maintenance payments when calculating net distributable cash flow. The immediate change requires project-level unitholder approval, auditor certification and disclosures on borrowing, leverage and distribution effects.