Strategic Management and Corporate Finance · Infrastructure Investment Trusts

SEBI InvIT Regulations 2014: Registration and Eligibility

Updated 11 October 2026

Under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, an InvIT must be registered with SEBI before it raises money. The trust is set up under the Indian Trusts Act, 1882, and its instrument is registered under the Registration Act, 1908. Every party must be fit and proper. The trustee must be a SEBI-registered debenture trustee and not an associate of the sponsor or manager.

Understand SEBI InvIT Regulations 2014: Registration and Eligibility

An InvIT (Infrastructure Investment Trust) pools money from investors and puts it into infrastructure projects. Investors hold units and receive returns from the project cash flows. The SEBI (Infrastructure Investment Trusts) Regulations, 2014 control who can set one up and how.

The law does not let any trust call itself an InvIT. A trust must first get registration from SEBI. Without registration, it cannot make an offer of units or act as an InvIT. So registration is the gateway to the whole framework.

SEBI looks at four things: the trust, the sponsor, the investment manager and the trustee. The trust is created under the Indian Trusts Act, 1882 and registered under the Registration Act, 1908. The sponsor sets up the trust and carries the business credibility. The investment manager runs the InvIT day to day. The trustee holds the trust assets for unitholders and supervises the manager.

The tests are built on three ideas. First, capacity: minimum net worth and relevant experience for the sponsor and the manager. Second, integrity: each party must be a fit and proper person. Third, separation: the trustee must be registered with SEBI as a debenture trustee and must not be an associate of the sponsor or the investment manager. This protects unitholders from conflicts of interest.

Numeric thresholds (net worth, experience, holding by sponsors) have been amended several times. In your answer, state the rule and the figure as in the Regulations as amended up to your exam, and check the latest text before the exam.

Key rules to remember

Registration requirement: No InvIT without SEBI registration; A trust cannot act as an InvIT or offer units until SEBI grants registration on an application made with the prescribed fee.
Form of the trust: Trust under Indian Trusts Act, 1882 + registered under Registration Act, 1908; The trust deed must have InvIT activity as its main objective.
Eligibility of the trust: Trust under Indian Trusts Act, 1882 with instrument registered under Registration Act, 1908 + InvIT objective + sponsor, manager and trustee each eligible; All parties must be fit and proper. Failure of one party can block registration.
Sponsor test: Body corporate / company / LLP + minimum net worth + infrastructure experience + sponsor holding + fit and proper; Original 2014 rule, stated as separate conditions. - Net worth: ₹100 crore for the sponsor, or for the sponsors together. - Holding: each sponsor to hold at least 5% of the units post-issue, and the sponsors together at least 15%. - Experience: five years in development of infrastructure or fund management in the infrastructure sector. Do not mix the net worth condition with the holding conditions. These figures and conditions have been amended, so check the amended text and how it applies where there are several sponsors.
Investment manager test: Company / LLP / body corporate in India + minimum net worth + experienced personnel + fit and proper; Original 2014 rule: net worth (or net tangible assets for an LLP) of at least ₹10 crore, with key personnel experienced in fund management, advisory services or infrastructure development. Check amended figures.
Trustee test: Registered with SEBI as a debenture trustee (Debenture Trustees Regulations) + not an associate of sponsor or investment manager; The trustee must also be a fit and proper person. Check the facts for any link that makes it an associate of the sponsor or the manager.

How to solve SEBI InvIT Regulations 2014: Registration and Eligibility questions

Use this method for any question on registration or eligibility under the InvIT Regulations. It keeps your answer in the provision, analysis, conclusion order that the examiner expects.

1Name the law: SEBI (Infrastructure Investment Trusts) Regulations, 2014, and state that registration with SEBI is compulsory before acting as an InvIT.
2Read the facts and list the parties: trust, sponsor, investment manager, trustee. Note any figures such as net worth, years of experience, and any relationships between parties.
3Test the trust: is it a trust under the Indian Trusts Act, 1882, registered under the Registration Act, 1908, with InvIT as its main objective?
4Test each party in turn against its own conditions: sponsor (form, net worth, experience), investment manager (form, net worth, personnel), trustee (registration with SEBI as a debenture trustee, not an associate of the sponsor or manager).
5Apply the fit and proper test to each party and look for disqualifying facts in the case.
6Compare each fact with the requirement and say clearly met or not met. Show the gap in figures where there is one.
7Conclude: eligible or not, and what the entity must do to cure the gap before applying.
8Add one practical compliance point, such as applying in the prescribed form with the fee or checking the latest amended thresholds.

Quickest way: Four-party checklist

When to use it: Use when a short case or a 5-mark question asks whether an InvIT or its parties are eligible for registration.

Write the four headings: Trust, Sponsor, Manager, Trustee.
Under each heading write one line with the key condition: registered trust with InvIT objective; net worth and experience; net worth and personnel; SEBI-registered debenture trustee and not an associate of the sponsor or manager.
Tick or cross each heading using the facts given.
Write a one-line conclusion and mention that all parties must also be fit and proper.

Common mistakes in SEBI InvIT Regulations 2014: Registration and Eligibility

Thinking the trustee can be a group company of the sponsor.
Students assume the trustee is just a service provider chosen by the sponsor.
Fix: Remember that the trustee must not be an associate of the sponsor or the investment manager. Its job is to protect unitholders, so a link with the sponsor or manager defeats that purpose.
Mixing up the net worth conditions of the sponsor and the investment manager, or mixing net worth with sponsor holding.
Both are tested on net worth and the figures look alike. The sponsor rule also has holding conditions that sit close to the net worth figure.
Fix: Learn them as a pair: the sponsor is the larger figure (₹100 crore for the sponsor or the sponsors together in the original rule) and the manager is the smaller (₹10 crore). Keep the sponsor holding conditions (at least 5% each and 15% together in the original text) separate from net worth. Confirm the amended text before the exam.
Writing that the trust is registered only with SEBI.
Students forget the first step of creating the trust.
Fix: State both steps: the trust is created under the Indian Trusts Act, 1882 and registered under the Registration Act, 1908, then registered with SEBI as an InvIT.
Leaving out the fit and proper test.
Students focus on numbers and treat integrity as a formality.
Fix: Add a line applying the fit and proper test to each party. A case may include a hint such as a past regulatory action.
Quoting old thresholds as if they never changed.
Notes copied from the 2014 text are not updated for later amendments.
Fix: Quote the rule and the figure from the latest amended Regulations. If unsure, state the principle and say the figure is as prescribed in the Regulations.
Treating the sponsor and the investment manager as the same entity.
In practice they are often group companies, so students blur their roles.
Fix: Keep the roles apart: the sponsor sets up the trust, and the investment manager manages the assets and the InvIT's activities. Each has its own eligibility test.

Worked examples

Example 1

Bharat Roads Trust is a trust registered under the Registration Act, 1908, with InvIT activity as its main objective. Its trustee, Sagar Trustee Services Ltd, is a SEBI-registered debenture trustee and a wholly owned subsidiary of the investment manager, Bharat Roads Management Pvt Ltd. Is the trust eligible for registration as an InvIT? Advise.

Show the solution

Provision: under the SEBI InvIT Regulations, 2014, the trust must be established under the Indian Trusts Act, 1882 with its instrument registered under the Registration Act, 1908, its main objective must be InvIT activity, and the trustee must be registered with SEBI as a debenture trustee and not an associate of the sponsor or the investment manager.
Trust test: not yet confirmed. The facts give registration under the Registration Act, 1908 and InvIT as the main objective. They do not say that the trust was created under the Indian Trusts Act, 1882, and the Regulations require this. Registration of the instrument alone does not satisfy the test, so confirm that the trust is established under that Act.
Trustee registration: Sagar Trustee Services Ltd is a SEBI-registered debenture trustee. This part is met.
Associate test: Sagar is a wholly owned subsidiary of the investment manager, so it is an associate of the investment manager. This condition is not met.
Other parties: the facts do not give the sponsor's or the investment manager's net worth, experience or fit and proper status, so these conditions cannot be assessed here.
Conclusion: the trustee fails the non-associate condition, and this is the decisive defect. The application cannot succeed as structured. The trust should appoint a SEBI-registered debenture trustee that is not an associate of the sponsor or the manager, confirm that it is established under the Indian Trusts Act, 1882, and test the sponsor and manager conditions before it applies.

Answer: The trust is not eligible as structured. The trustee is an associate of the investment manager, and this is the decisive defect. The trust test is also unconfirmed, because the facts do not show that the trust was created under the Indian Trusts Act, 1882. After it appoints a SEBI-registered debenture trustee that is not an associate of the sponsor or manager and confirms the trust test, it can apply, subject to the sponsor and manager conditions (not given in the facts) being met.

Exam tips

Answer case questions in order: provision, facts, conclusion. Examiners give marks for each step.
Use the four-party structure (trust, sponsor, manager, trustee) as your skeleton so you do not miss a party.
Always check the trustee: it must be a SEBI-registered debenture trustee and not an associate of the sponsor or the manager.
State figures only as the Regulations prescribe, and write that the thresholds are as amended. Do not guess numbers.
If the question gives a relationship between parties, check whether it makes one an associate of another.

Practice questions from Infrastructure Investment Trusts

SEBI InvIT Regulations 2014: Registration and Eligibility: frequently asked questions

Who can be the trustee of an InvIT?

The trustee must be registered with SEBI as a debenture trustee. It must also be a fit and proper person and must not be an associate of the sponsor or the investment manager. This separates it from the parties it supervises. The trust itself is established under the Indian Trusts Act, 1882 and its instrument is registered under the Registration Act, 1908.

Is SEBI registration compulsory for an InvIT?

Yes. Under the SEBI (Infrastructure Investment Trusts) Regulations, 2014, a trust cannot act as an InvIT or offer units unless SEBI has granted it registration. The application goes in the prescribed form with the fee.

What is the difference between the sponsor and the investment manager?

The sponsor sets up the InvIT as a trust and has to meet net worth and experience tests. The investment manager manages the InvIT's assets and investments and has its own, separate eligibility conditions. They are often group entities but are tested separately.

Do I need to remember exact net worth figures for the exam?

Learn the principle and the figure as in the latest amended Regulations. The original 2014 rule asked for ₹100 crore net worth for the sponsor or the sponsors together, and ₹10 crore for the investment manager. Sponsor holding is a separate condition: at least 5% for each sponsor and 15% for the sponsors together in the original text. Thresholds have been amended, so confirm the current text before the exam.