The Securities and Exchange Board of India (SEBI) has relaxed borrowing norms for Infrastructure Investment Trusts (InvITs).
The move is aimed at giving infrastructure projects more financial flexibility and improving access to funds across the sector.
InvITs that already have leverage above 49% of asset value will now get more room to raise additional funds under specific conditions.
More Freedom for Infrastructure Expansion and Upgrades
Under the new rules, InvITs are now allowed to raise extra borrowings beyond the 49% leverage limit.
However, this additional borrowing must be used for specific purposes such as:
Expanding project capacity
Improving asset performance
Funding capital expenditure
SEBI has also allowed InvITs to use additional debt for major maintenance work, especially in road infrastructure projects.
This includes non-routine repairs that are required under concession agreements.
In simple terms, it covers large-scale maintenance work that goes beyond regular upkeep.
Focus on Road Projects and Long-Term Maintenance
The relaxation is expected to benefit road-focused InvITs the most.
These projects often require heavy investment for periodic repairs and infrastructure upgrades.
SEBI has clarified that:
Only major maintenance costs are eligible
Routine maintenance is not included under this provision
Expenses must follow conditions mentioned in concession agreements
This change is designed to ensure better upkeep of large infrastructure assets without financial restrictions slowing down essential work.
Refinancing Rules Also Made Clear
SEBI has also permitted refinancing of existing debt for InvITs, special purpose vehicles (SPVs), and holding companies under certain conditions.
However, there is a key restriction:
Only the original principal amount can be refinanced
Interest, penalties, fees, or other charges cannot be included
This means companies can restructure core debt but cannot roll over extra financial burdens.
Why SEBI Introduced These Changes
The updated framework follows amendments made to SEBI’s InvIT regulations in April 2026, which expanded how borrowed funds can be used beyond earlier limits.
The new rules have come into effect immediately and are expected to:
Improve funding access for infrastructure projects
Support large-scale expansion plans
Strengthen long-term asset maintenance
Overall, SEBI’s move is aimed at making infrastructure financing more practical and flexible while ensuring financial discipline remains in place.
