REITs & InvITs mobilise ₹1.3L cr in 4 yrs: RBI data

‘India has been a late adopter of REITs & InvITs,’ said an article on ‘State of Economy’ published in RBI’s Bulletin

NEW DELHI: Investment vehicles for realty and infrastructure sectors — REITs and InvITs — have garnered Rs 1.3 lakh crore in the past four years till Marchend, and are expected to facilitate more pooled funds, Reserve Bank said in a report. Experts and stakeholders are of the view that with India growing at a fast pace, REITs and InvITs are emerging as alternative investment instruments, especially for high net-worth individuals.

“India has been a late adopter of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). However, the market is flourishing - REITs and InvITs have mobilised Rs 1.3 lakh crore since 2019-20 (up to March 2024),” said an article on ‘State of Economy’ published in the RBI’s April Bulletin.

March witnessed the listing of an InvIT, which raised Rs 2,500 crore through a public issue, attracting substantial interest from foreign investors.

The article noted that market regulator SEBI has progressively reduced the minimum investment size and trading lot, enabling greater retail participation

Experts & stakeholders are of the view that REITs and InvITs are emerging as alternative investment instruments, especially for high net-worth individuals

in these hybrid instruments. To further develop this space, the market regulator notified regulations for small and medium REITs on March 8, 2024. “This is expected to facilitate pooled investment in a wider range of real estate assets as a regulated financial product, thereby facilitating further growth of REITs in India,” said the article authored by a team led by RBI deputy governor Michael Debabrata Patra.

Rajeshwar Burla, Senior Vice President and Group Head - Corporate Ratings, ICRA, said the RBI allowed banks to lend to InvITs, which along with security enforcement for lenders under the SARFAESI Act, are some promising steps taken in recent times. “Thanks to a conducive regulatory framework,

and a strong pipeline of good operational assets, the industry was able to mobilise over Rs 1.3 lakh crore since FY2020. InvITs and REITs helped unwind capital blocked in already operational infrastructure assets – which can be re-invested into under-construction projects and support infrastructure development in India,” said Burla.