Mutual funds can now invest in REITs, InvITs: Sebi

To make real estate and infrastructure investment trusts more attractive for investors, regulator Sebi has notified norms allowing mutual funds to invest their money in such entities. The move comes after Sebi in its board meeting last month permitted mutual funds to invest in real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). A mutual fund is permitted to invest only up to 5 per cent of its net asset value in units of a single issuer of alternative securities.

The maximum allowed investment in alternative instruments by a single fund will be capped at 10 per cent. The cap will not be applicable in the case of index fund or sector- or industry-specific scheme. "A mutual fund may invest in the units of REITs and InvITs... No mutual fund under all its schemes shall own more than 10 per cent of units issued by a single issuer of REIT and InvIT," Sebi said in a notification dated February 15.

The move is part of Sebi's effort to get more number of investors into REITs and InvITs. Both REITs and InvITs are expected to help garner billions of dollars into the country's real estate and infrastructure segments.

Meanwhile, Wilo Se, AVTIL Enterprise and Swallow Associates have settled cases with market regulator Sebi related to non-disclosure of shareholding information within the prescribed timeframe after paying a total of Rs 12 lakh as settlement fee.

It was alleged that AVTIL Enterprise (formerly known as Arun Varun Trade and Investment Ltd) failed to make disclosure under Sebi's SAST (Substantial Acquisition of Shares and Takeovers) Regulations for 7 years from 2005 to 2011, while Wilo Se did not make disclosure for the years 2012, 2013 and 2014 in the matter of MPF Systems.