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The infrastructure sector in India has historically failed to attract large offshore capital because of various systematic reasons – one of which being the absence of a well-governed tax optimal investment structure. To provide a more flexible regime for sophisticated investors, SEBI introduced the concept of ‘unlisted’ InvITs. However, SEBI has significantly eroded the very idea and lucrativeness of unlisted InvITs with its recent amendments. Effective August 2021, SEBI prescribed that every unlisted InvIT must have (a) a minimum of 5 distinct unit holders required other than the sponsor, its related parties, and its associates; and (b) such 5 unitholders must hold at least 25% of the total InvIT units.

Click to read more – SEBI’s Public Float for Private Unlisted InvITs