CIRCULAR
HO/24/13/12(1)2025-IMD-POD-2/I/157/2025 November 28, 2025
All Mutual Funds/
All Asset Management Companies (AMCs)/
All Trustee Companies/ Board of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)/
Registrar Transfer Agents (RTAs)
Sir / Madam,
Subject: Reclassification of Real Estate Investment Trusts (REITs) as equity
related instruments for facilitating enhanced participation by Mutual Funds
and Specialized Investment Funds (SIFs)
1. With a view to facilitate enhanced participation by Mutual Funds and Specialized
Investment Funds (SIFs) in Real Estate Investment Trusts (REITs), SEBI vide
Gazette notification no. SEBI/LAD-NRO/GN/2025/272 dated October 31, 2025
carried out amendments to SEBI (Mutual Funds) Regulations, 1996 for
reclassification of REITs as equity related instruments. In accordance with the
same, it has been decided as under:
a. With effect from January 01, 2026, any investment made by Mutual Funds
and SIFs in REITs shall be considered as investment in equity related
instruments. InvITs shall continue to be classified as hybrid instruments for
the purpose of investments by Mutual Funds and SIFs.
b. Existing investment in REITs held by debt schemes of Mutual Funds and
investment strategies of SIFs as on December 31, 2025, shall be
grandfathered. However, AMCs are encouraged to make efforts to divest REITs
from respective portfolios of debt schemes considering the market conditions,
liquidity and interest of investors.
c. In terms of para 2.7 of the Master Circular for Mutual Funds dated June 27,
2024, AMFI shall include REITs in the list of classification of scrips as per their
market capitalization.
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d. AMCs shall issue an addendum to make necessary changes in the scheme
documents and the same shall not be considered as fundamental attribute
change for the scheme.
e. Any inclusion of REITs in the equity indices shall be carried out only after a
period of six months i.e, July 1, 2026.
2. This circular is issued in exercise of powers conferred under Section 11 (1) of the
Securities and Exchange Board of India Act, 1992, read with the provisions of
Regulation 2(1)(ja) of SEBI (Mutual Funds) Regulations, 1996, to protect the
interest of investors in securities and to promote the development of, and to
regulate the securities market.
3. This Circular is available at www.sebi.gov.in under the link “Legal > Circulars”.
Yours sincerely,
Priyanka Mahapatra
General Manager
Investment Management Department
Email: priyankam@sebi.gov.in
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