The Securities and Exchange Board of India (SEBI) on November 28, 2025, issued a circular regarding the Reclassification of Real Estate Investment Trusts (REITs) as equity related instruments for facilitating enhanced participation by Mutual Funds and Specialized Investment Funds (SIFs).
SEBI has amended the SEBI (Mutual Funds) Regulations, 1996 to reclassify Real Estate Investment Trusts (REITs) as equity-related instruments, effective October 31, 2025, with the following key decisions:
• Effective January 01, 2026, investments by Mutual Funds and Specialized Investment Funds (SIFs) in REITs will be treated as equity-related investments, while InvITs will continue to be classified as hybrid instruments.
• Existing REIT investments held by debt mutual fund schemes and SIF strategies as on December 31, 2025, will be grandfathered. Asset Management Companies (AMCs) are encouraged to gradually divest such holdings depending on market and liquidity conditions.
• AMFI will update the classification list of scrips as per market capitalization to include REITs, in line with the Master Circular for Mutual Funds (June 27, 2024).
• AMCs must issue an addendum to update scheme documents to reflect these changes. This will not be treated as a change to the scheme’s fundamental attributes.
• REITs may be included in equity indices only after July 01, 2026 (six months after the reclassification becomes effective).
[Circular No. HO/24/13/12(1)2025-IMD-POD-2/I/157/2025]
