The September 2026 meeting of the Securities and Exchange Board of India comes at a time when India’s capital markets are expanding not only in scale, but also in the range of instruments through which capital is being raised and deployed. The first few months of FY2026-27 alone saw REITs and InvITs mobilise INR 10,844 crore including INR 6,005 crore through REITs and INR 4,839 crore through InvITs and INR 2,62,142 crores through equity issuances, according to September 2026 Bulletin by SEBI. That level of activity makes the question of how these vehicles can access a wider investor base in an efficient manner, increasingly relevant.
Against this backdrop, three decisions taken at SEBI’s 24 September 2026 Board meeting stand out. The significance is particularly evident in the case of REITs and InvITs, where the decision potentially creates a new bridge between India’s listed real-asset platforms and overseas pools of capital.
REITs and InvITs Look Beyond the Domestic Unit Market
SEBI has approved a framework enabling depository receipts (DRs) to be issued against units of REITs and publicly listed InvITs. The proposal had been put out for consultation in August 2026, following which the Board approved amendments to provide the enabling framework. The detailed operational framework is to follow separately.
This is more than a change in instrument nomenclature. A DR structure can allow an overseas investor to obtain exposure to an underlying Indian security through a security issued and traded in another market. For REITs and InvITs, that creates an additional channel for accessing foreign capital without requiring the overseas investor to participate directly in the Indian unit market in the same manner as an onshore investor.
The importance of this distinction lies in market access. India’s REIT and InvIT frameworks have already created listed vehicles through which investors can obtain exposure to income-generating real estate and infrastructure assets. The DRs route potentially extends that investment proposition to investors who may be more accustomed to accessing securities through international or IFSC-based market infrastructure. Given the push for monetization of certain classes of assets which have offshore presence, such as ships and petroleum infrastructure, this move may allow these assets to be pooled and monetized through the InvIT route more efficiently and to a wider audience.
We already witness, how Singapore’s regulatory and exchange infrastructure demonstrates that depository receipts can be used to connect securities markets without eliminating the regulatory framework applicable to the underlying securities. SGX’s rules, for example, recognise global depository receipts as a distinct listed instrument and require the underlying securities to remain subject to the rules of their home exchange. Its framework also requires the depository to be a supervised financial institution with appropriate expertise.
For Indian REITs and InvITs, the practical question now shifts from whether foreign investors can obtain exposure to whether the DRs structure can make that exposure sufficiently efficient and familiar to attract meaningful overseas participation.
PMS Moves From a Narrower Mandate to a Broader Investment Platform
The second major development is the comprehensive review of the PMS framework. SEBI’s July 2026 consultation paper had proposed a substantial reconsideration of the investment universe and operating framework for portfolio managers.
SEBI’s decision now moves the framework further towards a model in which PMS can serve investors across a broader range of market opportunities. Some of the key changes approved include permitting portfolio managers to participate in IPOs and primary-market debt issuances, and providing greater flexibility in asset classes especially overseas securities and specified unlisted debt, subject to the applicable conditions. SEBI has also approved a dedicated route for portfolio management services focused on investment in mutual funds, with a minimum investment threshold of INR 25 lakh.
This matters because PMS has historically occupied a distinct space between standardised pooled investment products and fully bespoke investment management. SEBI has clearly recognized that the Indian investment services market is expanding with a wider range of investors needing access to boutique investment services and not simply pooled investment schemes. Expanding its permissible investment universe changes the proposition from simply how a portfolio is managed to, more fundamentally, what opportunities the portfolio manager can access on behalf of the client, which is also a recognition that Indian investors are broadly looking to tap into niche growth sectors offered by international markets, beyond the more generalized mutual fund schemes.
The inclusion of IPOs and primary debt is particularly relevant. It brings PMS closer to the primary-market ecosystem, potentially allowing portfolio managers to consider securities at the point of issuance rather than restricting portfolio construction primarily to instruments already available in the secondary market. This will make PMS an important part of the non-institutional investors category in the coming days and may also have a potential effect of reducing reliance on borrowing for investment in IPOs. Further, independent fund managers, who can utilize the services framework of a registered portfolio manager will help clarify the structures market intermediaries can utilize to assist investors.
The overseas investment component is equally significant in the context of wealth management. It reflects the growing reality that sophisticated Indian investors increasingly view portfolio construction through a cross-border lens. At the same time, SEBI’s approach remains conditional rather than unrestricted, reinforcing the principle that greater investment flexibility must operate within defined regulatory parameters.
The INR 25 lakh PRIM route is perhaps the clearest indication that SEBI is attempting to create segmented regulatory architecture rather than a one-size-fits-all PMS model. Instead of treating all PMS activity identically, the framework recognises a distinct category for investors seeking professional management focused on mutual-fund investments.
FPIs Enter a Deeper Commodity-Market Role
The third decision extends institutional participation in India’s commodity markets. SEBI has approved a framework permitting FPIs to participate in physically settled, non-agricultural commodity derivative contracts, subject to the prescribed framework and safeguards. The proposal had been considered through SEBI’s August 2026 consultation on FPI participation in exchange-traded commodity derivatives.
The significance is not simply that another class of investors will be permitted into another asset class. Commodity derivatives perform important price-discovery and risk-management functions, and greater institutional participation can potentially broaden the range of market participants contributing to those functions.
Making Indian Markets More Accessible
Viewed separately, the three measures address REITs and InvITs, portfolio management and commodities. Viewed together, they suggest a broader shift in India’s securities-market architecture.
The REIT/InvIT decision creates a potential cross-border capital-raising channel. The PMS overhaul expands the investment universe available to professionally managed portfolios. The FPI decision broadens institutional participation in commodity derivatives.
What connects them is not deregulation for its own sake. It is the attempt to make India’s market infrastructure more compatible with the ways in which sophisticated domestic and international capital is already deployed globally.
The decisions taken in 24 September meeting is an evolution of India’s capital-market architecture. The direction is increasingly clear: rather than creating isolated products for isolated investor categories, regulation is beginning to focus on building more connected routes between Indian securities, global capital and institutional investment strategies.
The real measure of these reforms will therefore be whether the additional routes created on paper translate into deeper participation, more efficient capital formation and greater choice without compromising the safeguards on which market confidence ultimately depends. The effectiveness of the REIT/InvIT, DRS framework will depend substantially on the detailed rules governing issuance, eligible jurisdictions, disclosure, settlement and investor participation.
Authors: Pracheta Bhattacharya
