India’s markets regulator, the Securities and Exchange Board of India (SEBI), has introduced easing measures for Infrastructure Investment Trusts (InvITs), allowing greater operational flexibility for entities whose leverage exceeds the 49 per cent threshold of asset value. The move is part of SEBI’s broader effort to improve ease of doing business and strengthen infrastructure financing frameworks in the country.

Under the revised approach, InvITs that cross the 49 per cent leverage limit will be permitted to raise additional borrowings beyond earlier restrictive conditions. Previously, such borrowings were largely confined to acquiring or developing infrastructure assets, but the updated framework broadens the scope to include capital expenditure, major maintenance, and refinancing of existing debt. 

Regulatory documents indicate that the refinanced portion of debt must remain within disciplined limits, with only the principal component of earlier borrowings eligible for refinancing. The framework is designed to ensure financial prudence while still offering flexibility for infrastructure trusts managing large, capital-intensive projects. 

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SEBI has also clarified that despite the relaxation, InvITs will continue to operate under strict governance and leverage oversight conditions. These include compliance requirements such as credit rating standards, unitholder approvals in certain cases, and restrictions on how additional funds can be deployed, ensuring that investor protection remains central to the regulatory structure.

The easing of borrowing norms comes amid a broader set of regulatory reforms aimed at deepening India’s infrastructure investment ecosystem. Recent months have seen SEBI introduce multiple proposals to improve liquidity, simplify investment structures, and enhance operational efficiency across markets, including mutual funds and listed investment vehicles. 

Market observers note that the latest changes could improve financial flexibility for infrastructure trusts, enabling them to better manage long-term projects and funding cycles. At the same time, regulators are expected to maintain close oversight to prevent excessive leverage risks as InvITs expand their role in India’s infrastructure financing landscape.

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