In short: On 2 November 2026, SEBI issued frameworks allowing REITs and InvITs to raise money from foreign investors through depository receipts (DRs). These DRs are to be listed on the two exchanges at the International Financial Services Centre in GIFT City. Holders, and their beneficial owners, must not be residents of India.

What has SEBI done?

The Securities and Exchange Board of India (SEBI) issued two separate circulars, one for Real Estate Investment Trusts (REITs) and one for Infrastructure Investment Trusts (InvITs). Each sets out how units of these trusts can be used to create depository receipts that are traded on exchanges in GIFT City. The two exchanges named are India International Exchange (India INX) and NSE International Exchange.

According to reports, the proposal was put out in August and approved by SEBI in September. The aim is to attract more foreign capital into these sectors. REITs and InvITs listed in India can already accept foreign investment, subject to government and central bank rules. The DR route is an additional way in.

What is a depository receipt?

A depository receipt is a foreign-currency instrument. A foreign depository issues it against securities that are held with a domestic custodian in India. In this case, the underlying securities are REIT or InvIT units. Foreign investors, including non-resident Indians (NRIs), can then invest without buying the units directly on Indian exchanges.

The REIT circular builds on the Depository Receipts Scheme, 2014, the Foreign Exchange Management Act, 1999 and the SEBI REIT Regulations, 2014, which already allow DRs on REIT units if SEBI specifies the manner.

Key conditions

  • Who can hold DRs: a DR holder, including its beneficial owner(s), cannot be a person resident in India. The holder and beneficial owner are responsible for ensuring this.
  • Eligibility: the REIT must comply with its regulations. The trust, its parties, their directors, promoters and partners, and unitholders transferring units must not be debarred from the capital market, be wilful defaulters or be fugitive economic offenders. Past debarments that have ended before the offer document is filed do not count against them.
  • Unitholder approval: a fresh issue of DRs needs prior approval, with at least 75% of votes cast in favour. A fresh approval is not needed for later offerings within the overall limit already approved. The requirement also does not apply where a REIT is doing an initial offer in India and issuing DRs at the same time.
  • Existing unitholders: if DRs are created by existing unitholders transferring units, all existing unitholders must get an opportunity to tender their units.
  • Dual approvals: a REIT or InvIT listing in India and issuing DRs at the same time must seek approval from both the Indian exchange and the international exchange.
  • Pricing: as reported, units issued for DRs cannot be priced lower than the price offered to Indian investors in a similar offering.
  • Private InvITs: as reported, DRs on units of a privately placed InvIT can be subscribed to only by foreign institutional investors and corporate bodies.

How does the approval process work?

For a fresh issue, the manager of the REIT files the initial offer document, through a merchant banker, with SEBI and the recognised stock exchange(s). SEBI will try to send its comments to the exchange within 7 working days. The exchange considers those comments and decides on in-principle approval within 15 working days of receiving the application and required documents. The final offer document is filed for record.

The manager must also comply with the SEBI REIT Regulations, 2014, the Foreign Exchange Management Act, 1999, the Prevention of Money Laundering Act, 2002 and the rules made under them.

Related change for InvITs

Separately, SEBI has cut the cooling-off period for offer-for-sale transactions in illiquid units of privately listed InvITs from 12 weeks to eight weeks. It applies immediately. SEBI cited liquidity constraints from high trading lot sizes, which limit participation mainly to institutional investors, corporates and high-net-worth individuals.

Who is affected and what should you do?

  • REIT and InvIT managers: review the circulars before planning a DR issue, especially the approval and eligibility steps.
  • Existing unitholders: watch for notices of unitholder votes or invitations to tender units.
  • Foreign investors and NRIs: DRs offer a way to invest without buying units on Indian exchanges directly. Check the offer documents and the residency restriction.
  • Resident Indian investors: they cannot hold these DRs.

Frequently asked questions

Where will these depository receipts be listed?

On the GIFT City IFSC exchanges named in the framework: India International Exchange (India INX) and NSE International Exchange.

Can Indian residents buy these DRs?

No. A DR holder and its beneficial owners must not be persons resident in India.

Do unitholders get a say?

Yes. A fresh DR issue needs approval of at least 75% of votes cast, with limited exceptions. Where existing units are transferred, all unitholders must be offered a chance to take part.

Sources

Not legal advice. This page explains the law in general terms. Rules, fees and limits change, and your facts matter. Check the official source or consult a qualified advocate before acting. Disclaimer