SEBI’s two circulars of 2 November 2026 let infrastructure and real estate investment trusts (InvITs and REITs) issue depository receipts: foreign-currency instruments backed by their units, held outside India and listed in an International Financial Services Centre (IFSC). They set eligibility, a 75% unitholder vote and 7 and 15 working-day clocks. In force from 2 November 2026.
Harbour Road InvIT is a privately placed infrastructure trust. Its manager wants overseas funds to hold its units. A foreign depository would issue receipts that trade on an IFSC exchange.
| Minimum backing per receipt | If a unit was worth Rs 100 on the filing date, each receipt is backed by at least 25,000 units (Rs 25 lakh ÷ Rs 100). Our reading of paragraph 7(1)(a) with Regulation 14(2)(c) |
|---|---|
| Unitholder vote | If 120 votes are cast, at least 90 must be in favour (75%) |
| Who may hold | A foreign fund whose real owners live abroad: allowed on residence grounds. If a real owner lives in India: not allowed |
What is a depository receipt, and who are the players?
Think of a depository receipt (DR) as a ticket for units. The units stay in India. The ticket is issued abroad and listed on an international exchange.
Depository Receipt (DR)
A foreign-currency instrument issued abroad on the back of units deposited with a Domestic Custodian.
Foreign Depository
The firm abroad that issues the receipts. It must be regulated in the permissible jurisdiction and able to issue DRs there.
Domestic Custodian
The SEBI-registered Indian custodian that holds the deposited units.
Investment Manager (InvIT) or Manager (REIT)
The trust’s manager. It signs the agreements and answers for compliance.
Beneficial Owner
Defined by the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. The real person behind the DR holder.
InvIT and REIT
Each pools investors’ money and issues units.
What is the legal framework behind them?
The Depository Receipts Scheme, 2014 (the “DR Scheme”) is the parent. The Central Government notified it on 21 October 2014 (F. No. 9/1/2013-ECB). It came into force on 15 December 2014. The Foreign Exchange Management (Non-debt Instruments) Rules, 2019 (S.O. 3732(E), 17 October 2019) permit non-residents to invest in DRs on InvIT units, as the circular records.
SEBI’s trust regulations then open the door for units. Regulation 14(5C) of the InvIT Regulations and Regulation 14(12A) of the REIT Regulations say DRs may be issued on units, in the manner the Board specifies. Both took effect in October 2026 (16 and 15 October). The circulars supply that manner.
What is new, and who is affected?
BEFORE
Before October 2026 the InvIT and REIT Regulations had no clause on DRs on units. The enabling clauses were inserted with effect from 16 and 15 October 2026.
NOW
A route exists: DRs on InvIT or REIT units, in an IFSC only.
Both circulars are addressed to the trusts, their parties, exchanges, depositories and custodians. Permissible jurisdictions and international exchanges mean the IFSC in India: India International Exchange and NSE International Exchange.
How does a DR get issued, step by step?
Steps 2 to 4 are conditions, not a fixed sequence (our reading).
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Check eligibilitypara 5
The trust must comply with its SEBI regulations. It, its parties and any transferring unitholder must not be debarred, wilful defaulters or fugitive economic offenders. Debarment that has ended by filing does not count.
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Get unitholder approval before a fresh issueInvIT 7(4), REIT 7(3)
At least 75% of the total votes cast must be in favour. Exceptions are in the FAQ.
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Appoint a merchant banker and sign the agreementspara 8
The banker oversees compliance and reports to the manager’s board.
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File the initial offer documentInvIT 7(2), REIT 7(1)
The manager files it, through the merchant banker, with SEBI and the exchange(s).
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SEBI comments within 7 working daysInvIT 7(2)(a), REIT 7(1)(a)
SEBI shall endeavour to send comments to the exchange(s) within 7 working days of receipt.
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Exchange decides within 15 working daysInvIT 7(2)(b), REIT 7(1)(b)
The exchange considers SEBI’s comments and decides on in-principle approval within 15 working days of receiving the application and documents.
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File the final offer documentInvIT 7(2)(c), REIT 7(1)(c)
It goes to the exchange(s) and SEBI for record.
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Deposit units, then issue receiptspara 12(4)
The Foreign Depository shall not issue DRs until the Domestic Custodian confirms receipt of the units. The price must not be lower than for a corresponding domestic issue (para 11).
How do the InvIT and REIT circulars differ?
| Point | InvIT circular (24930) | REIT circular (24932) |
|---|---|---|
| Enabling provision | Regulation 14(5C) | Regulation 14(12A) |
| Trust manager | Investment Manager | Manager |
| Private-placement conditions (para 7(1)) | Yes. Each DR backed by at least units carrying the value in Regulation 14(2)(c); fresh DRs only for foreign investors as per Regulation 14(2)(b) | None. Paragraph 7 starts with the filing step, so numbering is one lower |
| Holding-limit rules the DR holder must meet | Regulation 14(2)(da) or 14(4)(ca), and 22(5C) | Regulation 14(2)(bb) and 22(6A) |
| Association addressed | Bharat InvITs Association | Indian REITs Association |
| Same in both | Eligibility, IFSC exchanges, 7 and 15 working days, 75% vote, pricing, voting, disclosure, custodian duties | |
In the InvIT Regulations (amended to 16 October 2026), 14(2)(b) covers institutional investors and body corporates and 14(2)(c) sets Rs 25 lakh as the minimum investment. Our reading: the REIT text has no private route because Regulation 14(1) makes a REIT’s initial offer public only.
What must trusts, depositories and custodians do after issue?
- Public holding. Units held at the depository count as non-public.
- Disclosures. Disclosures made on the international exchange must reach the Indian exchange within 24 hours.
- Holding limits. The DR holder’s domestic units are added to the units behind its DRs.
- Records. The Domestic Custodian reports issues and cancellations to the Indian depositories. Re-issuance follows Annexure 6 of the SEBI Master Circular of 30 December 2024.
What to do: appoint the merchant banker early and seek approval for an overall DR limit.
When does it apply?
Paragraph 15 of each circular: in force with immediate effect.
Legal basis
- Power used
- Section 11(1) of the SEBI Act, 1992, with Regulations 14(5C) and 33 of the InvIT Regulations, 2014 (InvIT circular) or Regulations 14(12A) and 33 of the REIT Regulations, 2014 (REIT circular)
Key facts
| Authority | Securities and Exchange Board of India (SEBI) |
|---|---|
| Instruments | Two circulars, ref. 24930 (InvIT) and 24932 (REIT) of HO/17/11/19(7)2026-DDHS-RAC/I |
| Issue date | 2 November 2026 |
| Effective date | Immediate effect (2 November 2026) |
| Listing venue | India International Exchange, NSE International Exchange (IFSC) |
| Last verified | 4 November 2026 |
Frequently asked questions
Can an Indian resident hold these depository receipts?
No. Paragraph 5(3): a DR holder, including its Beneficial Owner(s), shall not be a person resident in India. The holder is responsible for this.
Which exchanges can list the receipts?
Only India International Exchange and NSE International Exchange, in the IFSC in India (paragraph 6).
Does a REIT have to back each receipt with a minimum value, as a private InvIT does?
No. That condition, in paragraph 7(1) of the InvIT circular, applies to a privately placed InvIT. The REIT circular has no equivalent.
Is a unitholder vote needed for every depository receipt issue?
No. It is not needed for the simultaneous initial-offer route, or for a later offering within a limit unitholders already approved. Re-issuing under two-way fungibility (converting between units and receipts) is not a fresh issue.
Sources (official)
- SEBI circular HO/17/11/19(7)2026-DDHS-RAC/I/24930/2026, Framework for Issuance of Depository Receipts on Units of InvITs, 2 November 2026 https://www.sebi.gov.in/legal/circulars/nov-2026/framework-for-issuance-of-depository-receipts-on-units-of-invits-_105557.html
- SEBI circular HO/17/11/19(7)2026-DDHS-RAC/I/24932/2026, Framework for Issuance of Depository Receipts on Units of REITs, 2 November 2026 https://www.sebi.gov.in/legal/circulars/nov-2026/framework-for-issuance-of-depository-receipts-on-units-of-reits-_105558.html
- SEBI (Infrastructure Investment Trusts) Regulations, 2014, amended up to 16 October 2026 https://www.sebi.gov.in/sebi_data/attachdocs/oct-2026/1793187593604.pdf
- SEBI (Real Estate Investment Trusts) Regulations, 2014, amended up to 15 October 2026 https://www.sebi.gov.in/sebi_data/attachdocs/oct-2026/1792669152772.pdf
- Depository Receipts Scheme, 2014, Gazette notification of 21 October 2014 (Department of Economic Affairs) https://dea.gov.in/files/inline-documents/DRScheme_GazetteNotification21102024.pdf
- India
- SEBI
- Capital Market Regulations
- InvIT
- REIT
- IFSC
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