Tokenisation and Trust Structures Could Reshape Indian Investing

Mumbai, October 22: Securities regulator SEBI is preparing to expand the role of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in India, and Executive Director Maninder Cheema believes these vehicles could become the country's next big investment engines. Speaking on Thursday, she said they could offer retail investors a dependable source of regular income.

Cheema projected that REITs and InvITs could grow from 1.5 per cent of GDP to around 5 per cent. She also outlined the proposed corporate bond tokenisation pilot, measures to protect investors and a wider roadmap for tokenised financial assets.

She described both instruments as fast-expanding asset classes that let investors access real estate and infrastructure projects. A defining feature is the requirement to distribute 90 per cent of the cash flows generated, which gives investors steady returns and positions them as attractive yield-based options.

SEBI is currently consulting on whether REITs and InvITs should be permitted to purchase third-party assets instead of being confined to assets linked to their sponsors. If adopted, the framework would widen the universe of projects available to these trusts and could accelerate asset monetisation in infrastructure and real estate.

Cheema also pointed to SEBI's cooperation with the government on public asset monetisation. Land held by Central Public Sector Enterprises (CPSEs) is among the assets under consideration for productive use. She stressed that many assets in the country are not fully utilised and that policy support is needed to turn them into economic resources, adding that monetising public assets is a key government priority.

Alongside these efforts, SEBI is developing the second phase of Demat 2.0 to further digitise financial markets. Tokenised bond trading may be introduced under this phase in the future.

For the time being, corporate bond tokenisation is the main focus. Cheema noted that lower-liquidity assets are better suited to tokenisation, as the technology can improve the efficiency and security of delivery versus payment transactions. She said the pilot could eventually create a path for other financial assets, although no fixed timeline has been set for the next phase of Demat 2.0.