SEBI has allowed Infrastructure Investment Trusts (InvITs) to incorporate debt-funded maintenance expenses into their Net Distributable Cash Flows (NDCF), subject to certain approvals. This move is expected to enhance capital management for InvITs.
SEBI Approves Amendments for InvITs
In a significant development for Infrastructure Investment Trusts (InvITs), SEBI has granted permission for them to add back debt-funded road maintenance expenses into their Net Distributable Cash Flows (NDCF). This decision is aimed at assisting InvITs in better capital management and is contingent upon unitholder approval, audit certifications, and stringent disclosure requirements.
The inclusion of debt-funded maintenance expenses offers InvITs greater financial flexibility, enabling them to manage their operational costs more effectively while maximizing returns to their investors. SEBI’s move signifies a recognition of the dynamic challenges faced by InvITs in managing their finances.
Practitioners should take note of the requirements for unitholder approval and audit certifications as they develop compliance strategies for clients involved in InvITs. This enhancement in the regulatory framework signals a commitment to fostering growth within the infrastructure sector.
Citations
- SEBI Regulations (2026) SEBI Decisions
