Sebi proposes interest rate derivatives for REITs, InvITs for risk hedging

04 Nov 2024 CW Team

Sebi's proposal also suggests allowing locked-in REIT and InvIT units to be transferred among sponsors and their affiliates, akin to the transfer norms for promoters of listed companies. This measure aims to provide flexibility in managing holdings without diminishing sponsors' commitment.

Other recommendations include treating fixed deposits as cash equivalents for leverage calculations, clarifying credit rating requirements for REIT and InvIT borrowing, mandating timely board appointments, and expanding REIT and SM REIT asset bases. Sebi also proposed allowing REITs to invest in liquid mutual funds.

The regulator further suggests defining "common infrastructure" for REITs to include utilities like power, heating, cooling, water treatment, and waste management systems serving one or more REIT assets, even if technically not within a single project. For power plants, excess energy could be sold to the state grid, benefiting REIT assets financially.

To improve transparency, Sebi plans to amend InvIT quarterly reporting norms, mandating that reports directly reflect InvIT performance, rather than only investment manager segments, aligning with REIT standards. Sebi also proposes aligning REIT and InvIT NRC (Nomination and Remuneration Committee) composition with listed company standards, allowing a mix of independent and non-executive directors.

For investor protection, Sebi aims to review conditions for InvITs seeking borrowing beyond 49%, scrutinize REIT investments in unlisted equities, and clarify trustee responsibilities across REITs, InvITs, and SM REITs.

In a separate paper, Sebi has proposed a framework for "restricted return InvITs," designed to offer structured returns with both downside protection and a cap on upside gains, ensuring predictable returns for infrastructure investors. These investments would be limited to high-net-worth investors, with a minimum unit price of Rs 5 billion and total assets of at least Rs 500 billion, with clear risk acknowledgment required prior to investment.

Sebi has invited public feedback on these proposals by November 13. (ET)

Markets regulator Sebi has proposed allowing Real Estate Investment Trusts (REITs), Small and Medium REITs (SM REITs), and Infrastructure Investment Trusts (InvITs) to use interest rate derivatives, like interest rate swaps, to hedge against interest rate risks. This would help stabilize cash flows, mitigate risks, and protect unitholder interests, especially for long-term infrastructure projects. Sebi's proposal also suggests allowing locked-in REIT and InvIT units to be transferred among sponsors and their affiliates, akin to the transfer norms for promoters of listed companies. This measure aims to provide flexibility in managing holdings without diminishing sponsors' commitment. Other recommendations include treating fixed deposits as cash equivalents for leverage calculations, clarifying credit rating requirements for REIT and InvIT borrowing, mandating timely board appointments, and expanding REIT and SM REIT asset bases. Sebi also proposed allowing REITs to invest in liquid mutual funds. The regulator further suggests defining common infrastructure for REITs to include utilities like power, heating, cooling, water treatment, and waste management systems serving one or more REIT assets, even if technically not within a single project. For power plants, excess energy could be sold to the state grid, benefiting REIT assets financially. To improve transparency, Sebi plans to amend InvIT quarterly reporting norms, mandating that reports directly reflect InvIT performance, rather than only investment manager segments, aligning with REIT standards. Sebi also proposes aligning REIT and InvIT NRC (Nomination and Remuneration Committee) composition with listed company standards, allowing a mix of independent and non-executive directors. For investor protection, Sebi aims to review conditions for InvITs seeking borrowing beyond 49%, scrutinize REIT investments in unlisted equities, and clarify trustee responsibilities across REITs, InvITs, and SM REITs. In a separate paper, Sebi has proposed a framework for restricted return InvITs, designed to offer structured returns with both downside protection and a cap on upside gains, ensuring predictable returns for infrastructure investors. These investments would be limited to high-net-worth investors, with a minimum unit price of Rs 5 billion and total assets of at least Rs 500 billion, with clear risk acknowledgment required prior to investment. Sebi has invited public feedback on these proposals by November 13. (ET)

Infrastructure Urban

04 May 2026

Jyoti Structures FY26 profit rises 56.5%

Jyoti Structures (JSL) recently reported strong financial results for the quarter and year ended 31 March 2026, driven by disciplined execution, cost management and steady progress across its order book.For Q4 FY2025-26, total income rose 44.2 per cent to Rs 2.41 billion from Rs 1.67 billion in Q4 FY2024-25. EBITDA increased 58.6 per cent to Rs 237 million, while EBITDA margin improved by 89 basis points to 9.84 per cent. Profit before tax grew 53.3 per cent to Rs 188.5 million, and net profit rose 51.9 per cent to Rs 181.4 million.For FY2025-26, total income grew 53.1 per cent to Rs 7.72 bill..

Infrastructure Energy

04 May 2026

Cat BEPU to Power Doppstadt Separator at IFAT 2026

Caterpillar’s Cat Battery Electric Power Unit (BEPU) has been selected by Doppstadt to power its SWS 6 Spiral Shaft Separator, which will be showcased for the first time at IFAT 2026 in Munich, Germany, from 4–7 May.The compact plug-and-play BEPU is designed to replace a diesel engine within the same space, using the same mounting locations and relative machine position. It integrates the battery, motor, inverter, onboard charging, cooling and controls, enabling OEMs to electrify existing chassis platforms without extensive redesign.Caterpillar and Cat dealer Zeppelin Power Systems have be..

Infrastructure Urban

04 May 2026

VECV sales rise 6.9% in April 2026

VE Commercial Vehicles, a joint venture between Volvo Group and Eicher Motors, recorded sales of 7,318 units in April 2026, compared to 6,846 units in April 2025, registering 6.9 per cent growth. The total included 7,159 units under the Eicher brand and 159 units under the Volvo brand.Eicher branded trucks and buses reported sales of 7,159 units during the month, up 6.6 per cent from 6,717 units in April 2025. In the domestic commercial vehicle market, Eicher sales rose 8.6 per cent to 6,797 units from 6,257 units a year earlier.Exports declined 21.3 per cent, with VECV recording 362 units in ..