Sebi chief Buch urges investors to invest in REITs and InvITs

Mumbai: Investors need to 'positively' look at assets such as REITs (real estate investment trusts), InvITs (infrastructure investment trusts), and municipal bonds, as they are crucial for the nation's growth, Madhabi Puri Buch, Sebi chairperson, said at a Sebi-NISM Research Conference here.

The value of these structured products will far exceed today’s value of goods and services produced by the corporate sector, added the Securities and Exchange Board of India (Sebi) chief.

In essence, REITs and InvITs are investment vehicles. The two, in fact, allow developers to monetize revenue-generating real estate and infrastructure assets, by securitizing and allocating units to investors without physically transferring the assets.

Pertinently, Buch specified that going forward fractional ownership of real estate and infrastructure is where the strength of the country will lie. She said to facilitate this and to put the building blocks in place to facilitate that growth, Sebi has actively taken certain initiatives.

“The first thing is for us as a regulator to get the comfort to go to retail investors, to go to our parents, in-laws, uncles, aunts, nieces and nephews to say, this is a very good product, you should invest in it,” she said.

The governance and disclosures of these asset classes now provide Sebi the ease and confidence to tell retail investors that it is comfortable with the way these assets are structured, Buch said.

Another thing, the Sebi chief said the endeavour was to bring down the minimum investment price, which was kept high initially due to the high risk profile of these investment products. “The objective is to facilitate smaller and smaller units of REITs so that ownership can be diverse and democratically held across Indian citizens.”

The regulator said it has facilitated innovation and digitization of the ecosystem for these structured products to ensure that the public can invest in them.

Buch concluded by mentioning that products like InvITs especially, have piqued the interest of investors, particularly the foreign ones.