SEBI Tightens Disclosure Norms for REITs and InvITs

The Securities and Exchange Board of India (SEBI) is changing how REITs and InvITs share information. The goal is to boost transparency, align with current rules, and help investors feel more confident about investing in these kinds of trusts.

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Key Amendments to Disclosure Norms

SEBI initiated a series of amendments encapsulating SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2025, and corresponding amendments for InvITs, requiring full financial disclosures in offer documents. A new Schedule IIIA titled 'Mandatory Disclosures in Scheme Offer Document' has been inserted, including details such as the trust's name, address, registration status, principal place of business, contact details, and background information. 

Furthermore, REITs and InvITs must now disclose combined financial statements for initial public offerings (IPOs), regardless of their operational tenure. Audited consolidated financial statements must be presented for follow-on offers, along with links to individual audited reports on their websites. 

Condensed Financial Statements? Not Anymore.

SEBI is stepping up investor protection by scrapping the use of condensed financial statements in offer documents and after listing. That means REITs and InvITs can no longer rely on short-form summaries of their financials; they now need to provide the whole picture. This shift aligns them with SEBI's existing disclosure rules under the ICDR and LODR frameworks.

More Frequent Updates, More Clarity

SEBI’s also changing how often REITs and InvITs need to report certain financial information. Instead of every six months, they now have to report quarterly on how they’re using proceeds from debt securities. If they have outstanding borrowings, they must share details like their net borrowing ratio and other key financial metrics. The goal is to help investors better understand the financial health of these trusts, especially their debt situations.

Making It All Match Up

These updated disclosure requirements will bring REITs and InvITs in sync with other SEBI-regulated entities. By aligning them with existing norms like ICDR and LODR, SEBI is pushing for consistency and better compliance across the board. It’s about creating a cleaner, more dependable reporting system.

Your Voice, Your Impact

Before making anything final, SEBI opened the floor to public feedback. Investors and stakeholders had until March 7, 2025, to share their thoughts via an online form. SEBI plans to factor in this input before locking in the new rules.

What This Means for the Market

This move is all about trust and transparency. With stricter disclosure standards and a push for complete financial clarity, SEBI wants to make REITs and InvITs more appealing, especially to retail investors. The long-term aim is to build a deeper, more vibrant market that gives investors confidence and makes these investment vehicles more accessible.

Wrapping It Up

SEBI’s latest updates for REITs and InvITs signal a serious commitment to transparency and investor trust. By demanding complete financial disclosures and harmonising with existing rules, the regulator is helping lay the foundation for a stronger, more reliable investment space in India