SEBI sets framework for depository receipts on InvIT units, listed in GIFT City
SEBI has issued rules letting infrastructure investment trusts issue depository receipts on their units to foreign investors, listed only on India's IFSC exchanges, with effect from 2 November 2026.
Key points
- SEBI issued a circular on 2 November 2026 setting a framework for depository receipts on units of infrastructure investment trusts (InvITs).
- A fresh issue needs at least 75% of votes cast by unitholders, and the receipts may be listed only on India INX or NSE International Exchange.
- Residents of India cannot hold these receipts, and an InvIT listing them via existing units must let all its unitholders tender units.
The Securities and Exchange Board of India (SEBI) on 2 November 2026 issued a framework that lets infrastructure investment trusts (InvITs) issue depository receipts on their units. An InvIT pools income-earning infrastructure assets such as roads or power lines and sells units to investors. The rules take effect immediately.
What Happened
A depository receipt is a foreign-currency instrument issued by a foreign depository against InvIT units held with a domestic custodian. Under the circular, these receipts may be listed only in the International Financial Services Centre in India, on India International Exchange or NSE International Exchange.
An InvIT can issue receipts only if it complies with SEBI's InvIT rules and if neither it nor the parties to it, nor any unitholder transferring units, is debarred by SEBI, a wilful defaulter or, for the parties and transferring unitholders, a fugitive economic offender. A holder of the receipts, including its beneficial owner, cannot be a person resident in India.
Any fresh issue needs prior approval of unitholders, with at least 75% of the votes cast in favour, except where the receipts are issued alongside an InvIT's initial offer. Units cannot be issued or transferred for the receipts at a price below what domestic investors pay in the matching mode of issue. SEBI will try to send its comments on an offer document to the exchanges within 7 working days, and the exchanges are to decide within 15 working days.
What It Means
For existing InvIT unitholders, the circular sets several protections. A fresh issue of receipts needs their vote. Where receipts are created by transferring existing units, the InvIT must give all unitholders a chance to tender their units. The investment manager must keep minimum public unitholding, and units held for the receipts count as non-public.
Any disclosure an InvIT makes on the international exchange must also be filed with the Indian stock exchange within twenty four hours, so domestic unitholders see the same information. Unitholders with complaints against an InvIT or its manager can use SEBI's SCORES portal at https://scores.sebi.gov.in.
Source: SEBI circular
Sources & Citations
- SEBI circular — Securities and Exchange Board of India