MF & SIF investments in REITs to be treated as equity from January 2026

Mutual fund and specialised investment fund (SIF) commitments to real estate investment trusts (REITs) from January 1 would be considered as investments in equity-related instruments, India's capital-markets regulator said Friday. However, infrastructure investment funds (InvITs) would continue to be classified as hybrid instruments for investments by mutual funds and SIFs.

Existing investment in REITs held by debt schemes of mutual funds and investment strategies of SIFs as on December 31,2025, would be grandfathered, the Securities and Exchange Board of India (Sebi) said Friday.

Fund houses are encouraged to make efforts to divest REITs from respective portfolios of debt schemes considering the market conditions, liquidity and interest of investors, it said.


The regulator said industry body AMFI should include REITs in the list of classification of scrips as per their market capitalisation.

Asset management companies would have to issue an addendum making necessary changes in the scheme documents and the same would not be considered as fundamental attribute change for the scheme.

"Any inclusion of REITs in the equity indices shall be carried out only after a period of six months i.e, July 1, 2026," Sebi said.