SEBI Updates Voting Rules and Sponsor Exit Options for InvITs
SEBI amended InvIT rules to ease voting approvals, permit foreign depository receipts, and guarantee exit options when sponsors change.
- Document
- Master circulars & regulations
- Dated
- 15 Oct 2026
- Effective
- Date of publication in the Official Gazette.
- Act by
- Date of publication in the Official Gazette.
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
- Special resolutions now pass with 75 percent of votes actually cast.
- Related parties are excluded when counting votes on major trust resolutions.
- Exiting sponsors must give dissenting unitholders an option to exit.
- InvITs are now permitted to issue depository receipts to foreign investors.
In short
The Securities and Exchange Board of India (SEBI) issued the InvIT Second Amendment Regulations 2026 to update voting and governance rules for Infrastructure Investment Trusts (InvITs), which are funds that pool investor money into income-generating projects. The document simplifies passing resolutions, allows global depository receipts, and protects investors when a sponsor leaves.
What has changed
How it worked before
Previously, major decisions required approval from 75 percent of the total unit value held by all investors in the InvIT. If many unit holders did not participate in voting, resolutions often failed. Additionally, there was no statutory requirement for an exiting sponsor to offer an exit path to investors who opposed the exit.
What has changed
Under the amended rules, resolutions pass if 75 percent of votes actually cast are in favour, ignoring related parties. When a sponsor exits, they must offer an exit option to unitholders who vote against the change. InvITs can now also issue Depository Receipts (DRs), which are securities allowing foreign trading, against their underlying units.
Who this affects
This affects managers and sponsors of Infrastructure Investment Trusts (InvITs), as well as individual and institutional unitholders holding InvIT units.
An example
An infrastructure investment trust holds a vote to make a major operational change. Previously, non-voting unit holders made reaching a 75 percent total value threshold difficult. Under the new SEBI rule, only votes actually submitted are counted, so if 75 percent of cast votes agree, the motion passes. If the trust sponsor later decides to step down, any unitholder who votes against the sponsor leaving must be offered a choice to sell their units and exit.
What you should do
InvIT investment managers must update their voting counting procedures to reflect 75 percent of votes cast and set up exit mechanisms for dissenting investors during sponsor changes. Individual investors do not need to file anything, but should note their updated voting and exit rights.
Deadline · Date of publication in the Official Gazette.If you do nothing
If an InvIT manager calculates votes incorrectly or fails to provide an exit option to dissenting unitholders, they violate SEBI regulations. SEBI can issue regulatory notices, impose penalties, or declare the underlying voting resolutions invalid.
The terms explained
- Infrastructure Investment Trust (InvIT)
- A pooled fund that owns and manages revenue-generating infrastructure assets like roads and power lines.
- Depository Receipts (DRs)
- Foreign securities issued overseas representing units or shares of an Indian entity.
- Unitholder
- An investor owning units in a trust, similar to a shareholder in a company.
- Sponsor
- The entity that sets up the trust and transfers its primary assets to it.
The original document
| Issued by | SEBI |
|---|---|
| Document | Master circulars & regulations |
| Full title | Securities and Exchange Board of India (Infrastructure Investment Trusts) (Second Amendment) Regulations, 2026 |
| Issued on | 15 October 2026 |
| Effective | Date of publication in the Official Gazette. |
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