NHAI and other unlisted PSUs best suited for InvIT monetisation, says Sebi chief Pandey

Sebi Chairman Tuhin Kanta Pandey on Friday said that unlisted entities such as the National Highways Authority of India (NHAI) and several state government undertakings are structurally better suited to adopt the Infrastructure Investment Trust (InvIT) model.

Speaking at the National Conclave on REITs and InvITs 2025 in New Delhi, Pandey also indicated that Sebi is examining the calibrated inclusion of REITs in key market indices. Bringing REITs into benchmark indices, he said, would enhance their liquidity, improve visibility, and encourage greater institutional participation in the segment.

Pandey said India’s REIT and InvIT framework has played a key role in “unblocking and building India’s infrastructure,” supporting the country’s long-term growth ambitions.

Despite being a relatively new financing instrument, India has seen strong momentum. “Five years since the first, we’ve had now five REITs in five years, which is quite phenomenal for a country like ours. But yet this is just the tip of the iceberg,” he said.

He noted that industry and regulators together have expanded the market from very small AUM levels a decade ago to more than ₹9 lakh crore today. The market has grown at “an impressive 22% year on year,” making India the fourth-largest REIT market in Asia behind Japan, Singapore and Hong Kong.

Over the past five years, REITs have mobilised $15 billion, rising from $37 billion in FY20 to $73 billion now. But India still lags mature markets in diversification, market depth and liquidity. In markets such as the US, Japan and Singapore, REITs account for more than 50% of listed real estate market capitalisation, compared with India’s 12%. However, Indian REITs offer stronger value, with distribution yields of 6–7.5% versus 2.5–3.5% in the US, 5–6% in Singapore and 4.5–5.5% in Japan, he said.

Pandey noted the key priorities for strengthening the market. The first is improving liquidity. Classifying REITs as equity for mutual funds will enable greater entry and exit and draw passive flows, including foreign participation. InvITs, he said, remain hybrid instruments “more in the nature of debt,” and institutional investors need separate limits to increase allocation.

He said expanding the investor base—especially pension funds, insurance companies and large NBFCs—is crucial. Allowing QIP investors to participate in REITs widens access and supports long-term inflows.

Currently, five real estate investment trusts (REITs) are listed in India, with a combined market capitalisation of ₹1.6 lakh crore as of market close on November 14, 2025. As of Q2 FY26, the Indian REIT market’s total gross Assets Under Management (AUM) stands at around ₹2,35,000 crore, according to the Indian REITs Association (IRA).

The listed REITs include Brookfield India Real Estate Trust, Embassy Office Parks REIT, Knowledge Realty Trust, Mindspace Business Parks REIT and Nexus Select Trust. The newest entrant, Knowledge Realty Trust, made its market debut on August 18, 2025. Collectively, the five REITs distributed over ₹2,331 crore to more than 3.3 lakh unitholders in the second quarter of the current financial year.

Together, they manage over 176 million sq. ft. of Grade A office and retail assets across the country. Since inception, India’s REITs have cumulatively distributed more than ₹26,700 crore to unitholders, underscoring their rising prominence in the country’s capital markets.