On 2 November 2026, the Securities and Exchange Board of India (SEBI) permitted Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to raise foreign capital through Depository Receipts (DRs). Two SEBI circulars set out the issuance and listing framework.
Depository Receipt framework
DRs are foreign-currency-denominated instruments issued by a foreign depository against securities held with a domestic custodian. The DRs will be listed on exchanges at the International Financial Services Centre (IFSC) in GIFT City: India International Exchange (India INX) and NSE International Exchange. Foreign investors, including non-resident Indians, can invest without directly buying trust units on domestic exchanges.
A fresh DR issue requires prior unitholder approval, with at least 75% of votes cast in favour. Further offerings within an approved overall limit do not need another approval. If existing unitholders transfer units for a DR issue, all unitholders must be given an opportunity to participate. DR holders and their beneficial owners must not be persons resident in India. Issuers and transferring unitholders must not be barred from capital markets, classified as wilful defaulters or identified as fugitive economic offenders.
OFS cooling-off period
SEBI also cut the cooling-off period for Offer-for-Sale (OFS) transactions involving illiquid units of privately listed InvITs from 12 weeks to eight weeks, effective immediately. The period applies to purchases and sales before and after an OFS. The existing periods are two weeks for the most liquid shares and four weeks for liquid shares. SEBI cited high trading lot sizes and limited participation as liquidity constraints for privately listed InvITs.
Important Facts for Exams
- Custodian safeguard: In a typical DR issue, a custodian linked to the overseas exchange helps verify the underlying shares and guard against manipulation.
- Regional forms: US-traded receipts are ADRs; European banks issue EDRs, while other banks issue GDRs.
- ADR denomination: An ADR is priced in US dollars, with dividends also paid in dollars, simplifying transactions for US investors.
