On July 01, 2025, Securities and Exchange Board of India (“SEBI”) issued a consultation paper proposing amendments to the Chapter 14 of Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024 (“Master Circular”) which provides framework for conversion of private listed InvIT into public InvIT.

The objective of the consultation paper is to simplify and ease the conversion process of private listed InvITs into public InvITs, by removing or relaxing minimum unitholders’ contribution, lock-in requirements and aligning disclosure norms.

Key Proposals:

1. Sponsor Contribution & Lock-in
• Current Requirement: The minimum sponsor contribution shall be 15% of the units issued through public issue or 15% of post-issue capital, which shall be subject to a lock-in of 18 months from the date of listing and units held in excess of minimum sponsor contribution are subject to a lock-in of 1 year from the date of listing.
• Proposed Change: Remove the sponsor contribution and lock-in requirements at the time of conversion, considering the already existing perpetual unitholding obligations introduced vide amendment to the SEBI (Infrastructure Investment Trusts) Regulations, 2014 (“InvIT Regulations”) dated August 18, 2023.
2. Non-Sponsor Unitholder Lock-in
• Current Requirement: The units held prior to the issue by persons other than sponsor(s) shall be subject to a lock-in of 1 year from the date of listing.
• Proposed Change: Eliminate lock-in for non-sponsor unitholders or the lock-in be reduced to 6 months to enhance market liquidity and avoid adverse impact on institutional investors.
3. Offer Document Disclosures
• Current: Treated as an initial offer.
• Proposed Change: Align disclosure and procedural requirements with follow-on offer, acknowledging that the public issue is subsequent to the initial offer.

Amendments proposed in the Master Circular:

• Paragraphs 14.6 and 14.7 to be revised to refer only to existing Regulation 12 of the InvIT Regulations for sponsor unitholding obligations and lock-in requirements.
• Relevant clauses to be updated to replace “initial offer” with “follow-on offer” and align disclosure requirements in the offer document accordingly.

The comments/ suggestions in relation to the draft circular may be submitted with SEBI by July 22, 2025.