SEBI clarified that Infrastructure Investment Trusts (InvITs) can borrow beyond 49% of asset value for capital expansion and eligible debt refinancing, enhancing investment flexibility.
Borrowing Flexibility for InvITs under SEBI Regulations
The Securities and Exchange Board of India (SEBI) has clarified that Infrastructure Investment Trusts (InvITs) are permitted to borrow in excess of 49% of their asset value when utilizing proceeds for specified purposes, such as capital expansion, road maintenance, and refinancing of eligible principal debt.
This clarification significantly increases the financial flexibility available to InvITs, allowing them to undertake necessary investments and enhance infrastructure projects without being constrained by strict borrowing limits. This regulatory change is poised to have a substantial impact on the financing capabilities of infrastructure assets in India.
For legal advisors working with InvITs, understanding the implications of this clarification will be critical in helping clients navigate the regulatory landscape, especially concerning financing strategies and compliance requirements for capital expenditures.
Citations
- SEBI Circular (2026) SEBI Report
