A Real Estate Investment Trust (REIT) is an investment entity designed for individuals to participate in real estate ventures. REITs function as companies that own, manage, or finance income-generating properties, encompassing residential buildings, commercial offices, retail centers, hotels, and industrial spaces.

The core objective of a REIT is to generate revenue through rental or lease payments derived from its property holdings. This investment vehicle enables individuals to engage in real estate investments without the direct ownership or management of properties. Investors can acquire shares or units of a REIT, representing their stake in the underlying real estate portfolio.

A distinctive feature of REITs is their obligation to distribute a substantial portion of their income to shareholders in the form of dividends. Legal requirements in various countries, such as the United States, mandate REITs to distribute a specific percentage of their taxable income to shareholders annually, often set at around 90%. This dividend distribution aspect makes REITs appealing to investors seeking regular income.

Investing in REITs allows individuals to access the real estate market, potentially benefiting from property value appreciation, rental income, and dividend payments. Typically traded on stock exchanges, REITs offer liquidity for investors looking to buy or sell their shares.

It's crucial to acknowledge that REITs are subject to specific regulations and requirements in each jurisdiction of operation. These regulations cover aspects like the permissible types of properties in a REIT portfolio, minimum distribution requirements, and the governance structure of the REIT.

On Wednesday 6th day of December 2023 SEBI has come up with Revised framework for computation of Net Distributable Cash Flow (NDCF) by Real Investment Trust (REIT)

Regulation 18(16) of the Securities and Exchange Board of India (SEBI) Real Estate Investment Trust (REIT) Regulations, 2014, outlines that the Net Distributable Cash Flow (NDCF) must be calculated for both the REIT and its affiliated entities, specifically HoldCos/SPVs. This computation mandates a minimum distribution of 90% of the NDCF at both the REIT and HoldCo/SPV levels, subject to the relevant provisions in the Companies Act, 2013, or the Limited Liability Partnership Act, 2008.

In more detail, Paragraph F of Chapter 3 in the Master Circular for Real Estate Investment Trusts provides a reference framework for the calculation of NDCF at the SPV and REIT levels.

In the interest of fostering a business-friendly environment, there is a decision to standardize the framework for determining available Net Distributable Cash Flows. Consequently, the updated framework for the computation of NDCF by REITs and their affiliated HoldCos/SPVs is detailed in Annexure A.

This revised framework will become effective from April 1, 2024, and supersedes the prior Framework for the calculation of Net Distributable Cash Flows outlined in Paragraph F of Chapter 3 of the Master Circular for Real Estate Investment Trusts, dated July 06, 2023.



The Infrastructure Investment Trusts (InVITs) are regulated by the Securities and Exchange Board of India (SEBI), serving as a specialized form of investment similar to Real Estate Investment Trusts (REITs). Introduced by SEBI in 2014, InVITs aim to address the unique requirements of the infrastructure sector, contributing to the development of the country's infrastructure.

The InVIT structure consists of four key components: trustee, sponsor, investment manager, and project manager. Each of these components plays a crucial role in the effective functioning of InVITs.


The trustee is responsible for overseeing the performance of the Infrastructure Investment Trusts. The trustee's role is certified and regulated by SEBI, ensuring compliance with regulatory standards.


The sponsor or sponsors are entities or individuals that promote the establishment of InVITs. Sponsors play a key role in the formation and initial structuring of the InVIT.

Investment Manager:

The investment manager is tasked with supervising the investments made through the Infrastructure Investment Trusts. This component is responsible for strategic decision-making regarding the InVIT's investment portfolio.

Project Manager:

The project manager focuses on the execution of projects planned by the Infrastructure Investment Trusts. This role is crucial for the successful implementation and completion of infrastructure projects within the InVIT portfolio.

The establishment of InVITs provides investors with an avenue to participate in the infrastructure sector while offering a structured and regulated investment vehicle. SEBI's oversight ensures transparency, accountability, and adherence to regulatory guidelines, contributing to the growth and development of the infrastructure sector in India.


On Wednesday 6th day of December 2023 SEBI has come up with Revised framework for computation of Net Distributable Cash Flow (NDCF) by Infrastructure Investment Trusts (InvITs)

To make business operations smoother, SEBI have decided to create a standard way of figuring out how much cash can be distributed. This applies to Infrastructure Investment Trusts (InvITs) and their related companies (Holdcos / SPVs). The new rules for calculating this cash distribution are detailed in Annexure A.


According to Rule 18(6) of SEBI's 2014 regulations for Infrastructure Investment Trusts (InvIT Regulations), it says about Net Distributable Cash Flow (NDCF) for both the InvIT and its associated companies (HoldCo / SPV). At least 90% of this cash needs to be distributed, both at the InvIT level and the HoldCo / SPV level. But, this is subject to some rules in the Companies Act, 2013, or the Limited Liability Partnership Act, 2008.


For details, please refer part (Paragraph F) in Chapter 3 of the Master Circular for Infrastructure Investment Trusts that gives a hint about how to calculate this Net Distributable Cash Flow, both at the InvIT and the SPV levels.


The new rules will start being used from April 1, 2024. These replace the old rules for calculating Net Distributable Cash Flows, which were mentioned in Paragraph F of Chapter 3 of the Master Circular for Infrastructure Investment Trusts dated July 06, 2023.