The Securities and Exchange Board of India (SEBI) vide its Circular No. SEBI/HO/DDHS/DDHS-PoD-2/I/11698/2026, dated May 15, 2026, gives effect to an amendment made on April 17, 2026 to Regulation 2(1)(zy)(ii) of the Infrastructure Investment Trusts (InvIT) Regulations, which introduced a proviso clarifying that in respect of an SPV holding an infrastructure project, the conclusion or termination of a concession agreement, or any other agreement of a similar nature, shall not affect the SPV’s status as an SPV. SEBI said that such an SPV shall continue to be classified as an SPV, subject to the fulfilment of conditions as may be specified by SEBI. This amendment provides regulatory certainty to InvITs holding SPVs whose underlying concession agreements have expired or been terminated, ensuring that such SPVs are not automatically disqualified from the InvIT structure.
The Circular imposes a time-bound obligation on the Investment Manager to either exit its investment in such an SPV (by way of sale, liquidation, winding-up, or merger) or acquire a new infrastructure project within that SPV, within one year from the latest of the following events: (i) completion or termination of the concession agreement or similar agreement; (ii) conclusion of all pending claims, litigations, tax assessments, and related appeals; or (iii) completion of the defect liability period. Importantly, any time taken to obtain relevant statutory or regulatory approvals for exiting the investment shall be excluded from the computation of the one-year timeline, providing a practical carve-out for regulatory delays.
Until the InvIT exits its investment in such an SPV, the circular mandates comprehensive disclosures in the InvIT’s annual report, operating at two levels. At the InvIT level, the Investment Manager must disclose a detailed breakup of the value of investments, on both a gross and net basis, in SPVs where the concession agreement or similar agreement has ended or been terminated. At the SPV level, additional disclosures are required for each such SPV, covering: (i) brief project details and the date of termination/conclusion of the agreement, along with the status of any vesting certificate or similar document issued by the concessioning authority upon handover; (ii) assets and liabilities of the SPV, including specific reserves, on a broad/grouped basis as per the annual audited financial statements; (iii) details of contingent liabilities as set out in the audited financial statements; and (iv) details of outstanding debt, if any, along with the repayment schedule.
Beyond financial disclosures, the circular also requires the Investment Manager to disclose whether the SPV has sufficient assets to meet its liabilities, including contingent liabilities, and if not, how such liabilities are planned to be met. Additionally, a clear exit strategy and timeline must be disclosed, detailing how and when the InvIT intends to exit its investment in the SPV or acquire a new infrastructure project, along with steps taken so far and the expected timeline for completion. Finally, any other material details relating to the SPV, including pending claims, litigations, assessments, statutory or contractual obligations, and the balance period of the defect liability period, must also be disclosed.
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