Two SEBI circulars dated 2 November 2026 establish substantially parallel routes for depository receipts backed by units of Real Estate Investment Trusts and Infrastructure Investment Trusts. Both frameworks came into force immediately.
What the framework allows
A compliant REIT or InvIT may issue new units for a DR programme. Existing unitholders may also transfer units to the domestic custodian so that the foreign depository can issue DRs against them. In either case, the underlying asset is the trust’s units—not direct ownership of the property, road, power asset or other project.
| Permissible jurisdiction | International Financial Services Centre in India |
|---|---|
| Specified exchanges | India International Exchange and NSE International Exchange |
| Eligible holders | Persons resident outside India; the beneficial owner must also satisfy this condition |
| Effective date | 2 November 2026, with immediate effect |
| Underlying security | Units of the relevant REIT or InvIT held with a domestic custodian |
Approval and filing route
The manager or investment manager must appoint a merchant banker for the DR issue. The initial offer document for a fresh issue must be filed with SEBI and the recognised Indian stock exchange. SEBI says it will endeavour to send comments to the exchange within seven working days; the exchange is to decide on in-principle approval within 15 working days after receiving the application and required documents.
A fresh DR issue generally needs prior unitholder approval with at least 75% of the votes cast in favour. The circulars provide exceptions for a simultaneous domestic initial offer and DR listing, and for a subsequent offering that remains within an overall limit already approved by unitholders. Where existing units are used for a fresh DR offering, all existing unitholders must be given an opportunity to tender units.
Investor-protection conditions
- Eligibility must be clean. The trust and specified connected persons must satisfy the applicable REIT or InvIT Regulations and the circular’s tests on debarment, wilful default and fugitive-economic-offender status.
- Domestic investors get a pricing floor. Units used for DRs cannot be issued or transferred below the price applicable to the corresponding domestic mode of issue.
- Public unitholding must be preserved. Units held at the depository for the DR programme are treated as non-public when minimum public unitholding is calculated.
- Holding limits aggregate both routes. Domestic units and units underlying DRs held by the DR holder, beneficial owners and relevant persons acting in concert must be counted as required by the applicable regulations.
- Information must travel back to India. Public disclosures made on the international exchange must also be filed with the recognised Indian exchange within 24 hours.
- No receipt before custody. The foreign depository cannot issue DRs until the domestic custodian confirms receipt of the underlying units.
Voting rights on the underlying units, if any, are exercised by the DR holder through the foreign depository and only on that holder’s voting instructions.
Important InvIT distinction
The InvIT circular adds specific conditions for privately placed InvITs, including the value of units backing each DR and the categories of foreign investors permitted to subscribe to a fresh issue. A private listed InvIT should therefore apply the InvIT-specific provisions rather than treating the REIT framework as interchangeable.
Who should act now?
REIT and InvIT managers, sponsors, existing institutional unitholders, prospective foreign investors, merchant bankers, domestic custodians, depositories and exchanges are directly affected. Indian resident retail investors are not eligible to hold these DRs; they continue to access eligible REIT and InvIT units through the domestic market.
- Choose the route. Decide whether the programme uses newly issued units, units tendered by existing holders, or accompanies an initial domestic listing.
- Run eligibility checks early. Screen the trust, parties, directors, promoters, partners and participating unitholders against the circular’s disqualification tests.
- Model the approval calendar. Allow for merchant-banker appointment, unitholder approval, SEBI comments and Indian and IFSC exchange approvals.
- Test pricing and public float. Document the domestic comparison price, the DR conversion ratio, holding limits and the minimum-public-unitholding impact before launch.
- Build the compliance chain. Align the manager, foreign depository, Indian depository and domestic custodian on unit receipt, issuance, cancellation, voting and 24-hour disclosure reporting.
Reviewed on 3 November 2026. This note summarises SEBI’s notified frameworks and does not replace issue-specific securities, FEMA, PMLA or IFSC advice.