The Securities and Exchange Board of India (SEBI) has introduced new relaxations in borrowing rules for Infrastructure Investment Trusts (InvITs).
These changes are designed to give infrastructure projects easier access to funds and improve financial flexibility across the sector.
The updated rules come at a time when India is pushing for faster infrastructure development, especially in roads and large-scale public assets.
Higher Borrowing Allowed for Growth and Expansion
Earlier, InvITs faced strict limits if their borrowing crossed 49% of their asset value.
Now, SEBI has allowed them to raise additional funds beyond this threshold under specific conditions.
This extra borrowing can be used for:
Capital expenditure to improve existing infrastructure
Expanding project capacity
Enhancing asset performance
This move is expected to help InvITs upgrade and scale their projects more efficiently.
Extra Funding for Road Maintenance Projects
SEBI has also allowed InvITs to use additional debt for major maintenance work, especially in road infrastructure projects.
However, this applies only to non-routine maintenance activities, such as:
Large-scale repairs
Obligations under concession agreements
Periodic infrastructure upgrades not covered under regular maintenance
According to SEBI, these expenses are essential for keeping long-term projects functional and efficient.
This change is likely to benefit road-focused InvITs the most, as they often require heavy investment for upkeep and repairs.
Refinancing Rules Made Clear
The regulator has also permitted refinancing of existing debt for InvITs, special purpose vehicles (SPVs), and holding companies—but with strict conditions.
Key rule changes include:
Only the principal loan amount can be refinanced
Interest, penalties, and additional charges cannot be included
Refinancing must follow specified regulatory conditions
SEBI has made it clear that only the original borrowed amount is eligible, ensuring financial discipline remains intact.
Why These Changes Matter
These new norms are part of SEBI’s updated framework introduced in April 2026, which expanded how InvITs can use borrowed funds beyond earlier limits.
The changes aim to:
Improve funding access for infrastructure projects
Support large-scale maintenance and expansion work
Strengthen long-term asset performance
With immediate effect, these relaxed rules are expected to give InvITs more operational freedom while supporting India’s growing infrastructure needs.
