SEBI Shakes Up Market: REITs Now Classified as Equity While InvITs Hold ’Hybrid’ Status

Regulators just redrew the lines—and your portfolio might feel the shockwaves.

SEBI's latest move reclassifies Real Estate Investment Trusts as pure equity plays, while Infrastructure Investment Trusts keep their hybrid designation. The decision splits two sister asset classes down the middle—sparking instant debate from Mumbai to Singapore.

Why the shake-up? Clarity. And maybe a nudge toward mainstream adoption.

REITs now sit beside stocks in brokerage accounts and ETF baskets. Expect more liquidity, sharper pricing, and—let's be real—more speculative swings. InvITs? Still hedging their bets between debt and equity, appealing to the cautious capital that likes a safety net.

One cynical take? Traditional finance loves putting things in boxes—even when the assets themselves would rather roam free. Classic.

Markets adapt. Smart money moves. Will you?

REITs Association hails milestone reform

“This important step marks a significant milestone in strengthening the REIT ecosystem in India and aligns with global best practices where REITs are part of equity indices,” said the Indian REITs Association in a statement.

“This decision is a step forward that will contribute to enhancing the depth of REIT market and accelerating the growth of these instruments in India. By enabling this, SEBI has paved way for widening investor participation in these instruments and improving liquidity,” it said.

InvITs retain hybrid tag for stability, liquidity

SEBI said that the reclassification takes into account the features of REIT units as being more inclined toward equity. Regarding the retention of InvITs as hybrid, it stated, “InvITs, on the other hand being products primarily privately placed with more stable cash flows and having lesser liquidity, the hybrid classification was proposed to be retained.”

It also pointed out that as a result of equity classification of REITs, the existing investment limit applicable for both REITs and InvITs WOULD now be exclusively available for InvITs and benefit them.

Strategic investor scope expanded by SEBI

In another major move, SEBI has expanded the scope of strategic investors in REITs and InvITs, which will widen the investor base in such securities.

Strategic investors will include all qualified institutional buyers, including retirement funds, AIFs, and state industrial development corporations, family trusts, as well as middle-layer, upper-layer, and top-layer Non-Banking Finance Companies registered with the Reserve Bank of India.

This will promote ease of doing business by enabling InvITs and REITs to attract capital from more investors under the strategic investor category, SEBI said.

Published on September 12, 2025