SEBI's new rules for depository receipts on InvIT units
SEBI's 2 November 2026 circular sets a new framework for depository receipts on InvIT units, effective immediately, mainly for investment managers.
- Document
- Circulars
- Dated
- 02 Nov 2026
- Effective
- With immediate effect (para 15 of the circular dated 2 Nov 2026).
- Act by
- With immediate effect
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The framework takes effect immediately, from the circular's date of 2 November 2026.
- DRs on InvIT units may be listed only on the two IFSC exchanges in India.
- The investment manager must appoint a merchant banker to oversee compliance.
- A fresh DR issue needs approval from at least 75% of the votes cast by unitholders.
- DR holders, including their beneficial owners, must not be resident in India.
In short
SEBI circular HO/17/11/19(7)2026-DDHS-RAC/I/24930/2026, dated 2 November 2026, sets out how an Infrastructure Investment Trust (InvIT) can issue depository receipts (DRs) on its units. An InvIT is a trust that holds infrastructure assets and issues units to investors. DRs are foreign-currency instruments that let overseas investors hold Indian-linked units through a foreign depository. This page covers the parts of the circular we reviewed; the original circular has the full text.
What has changed
How it worked before
The circular does not describe an earlier framework specific to InvIT units. Such DR issues were governed by the general Depository Receipts Scheme, 2014 and the foreign investment rules (NDI Rules, 2019). The circular does not say whether it replaces anything earlier.
What has changed
InvIT DR issues now follow a specific framework: a merchant banker oversees compliance, and offer documents go through the merchant banker to SEBI and the recognised stock exchange. Fresh DR issues need 75% unitholder approval, except in certain simultaneous IPO and listing cases. DRs must be listed only on IFSC exchanges, and existing unitholders must get a chance to tender units in transfer-based listings. Units held for DRs count as non-public holdings when checking minimum public unitholding.
Who this affects
Investment managers of InvITs, and sponsors of InvITs, who plan to issue depository receipts on InvIT units. Unitholders of an InvIT are affected only if their trust plans such an issue, because they get a vote and may be offered a chance to tender units.
An example
Consider a road-focused InvIT whose manager wants to raise overseas money by listing DRs on NSE International Exchange. The manager must first appoint a merchant banker, and then ask unitholders to approve the fresh issue. If 760 of 1,000 votes cast are in favour, that is 76%, which clears the 75% threshold.
What you should do
If you run or sponsor an InvIT that plans a DR issue, appoint a merchant banker, get at least 75% unitholder approval for a fresh issue, and file the initial offer document through the merchant banker. If you are not planning a DR issue, no action is needed based on the part of the circular we reviewed.
Deadline · With immediate effectIf you do nothing
The part of the circular we reviewed does not set out a specific penalty for non-compliance. The circular does require the investment manager to comply with the InvIT Regulations, the Foreign Exchange Management Act, 1999 and the Prevention of Money-Laundering Act, 2002. Breaking those rules could bring action under those laws.
The terms explained
- Depository receipt (DR)
- A foreign-currency instrument issued abroad that represents units of an Indian trust held with a local custodian. It lets overseas investors own the underlying units indirectly.
- InvIT (Infrastructure Investment Trust)
- A trust that holds infrastructure assets and issues units to investors, who then share in the income from those assets.
- Merchant banker
- A SEBI-registered firm that handles and oversees the paperwork and compliance for a securities issue.
- Beneficial owner
- The real person or entity that ultimately owns or controls the holding, even if it is registered in another name.
The original document
| Issued by | SEBI |
|---|---|
| Document | Circulars |
| Full title | Framework for Issuance of Depository Receipts on Units of InvITs |
| Issued on | 02 November 2026 |
| Effective | With immediate effect (para 15 of the circular dated 2 Nov 2026). |
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