Sebi chairman Tuhin Kanta Pandey has signalled a major policy shift, saying the regulator is working on a calibrated roadmap to include REITs and InvITs in market indices—an intervention expected to boost liquidity, visibility, and passive inflows into these asset classes.

Speaking at the 1st National Conclave of REITs & InvITs in Delhi, he said index inclusion would mark the next phase of growth for the segment, deepen institutional participation, and strengthen the role of these instruments in financing India’s long-term infrastructure needs, according to media reports.

Enhancing market access and bringing in institutional participation through a policy signal from the regulator could materially promote the role of these instruments in funding long-term capital and infrastructure needs of the country, he said.

Pandey said increasing liquidity in REITs and INVITs is important. India’s REIT market is the fourth-largest in Asia, but the depth of the market was limited compared to the top three REIT markets – Japan, Singapore, and Hong Kong by a wide margin.

“Retail participation in REITs and InvITs is still low. Our investor survey shows that awareness about these instruments is around 10 per cent, with penetration less than 1 per cent. This must change,” Pandey said.

In terms of investor participation, the combined assets under management of REITs and INVITs, along with small and medium REITs are estimated to be around Rs. 9.25 trillion.

Pandey said REITs and INVITs can play a central role through capital markets in building India’s infrastructure. Additionally, the markets regulator is working closely with the finance ministry and state governments to increase monetisation of public assets, he said. Raising capital through initial public offerings and rights issues will also be simplified, he said.

Further, the regulator is also considering widening the pool of liquid mutual funds where REITs and INVITs can invest, in order to increase market participation, Pandey said.

“We are examining a proposal to expand the pool of liquid mutual fund schemes, in which REITs and InvITs can invest, while safeguarding investor interests,” Pandey said.