India's REIT and InvIT market has 32 listed trusts with a current AUM of ₹10 lakh crore. Avendus Capital's June 2026 report projects AUM doubling to ₹20 lakh crore by 2030. SEBI classified REITs as equity instruments from January 2026 and allowed equity index inclusion from July 2026. Crisil Ratings projects commercial office REIT leasable area to rise 25–30% by FY2028, reaching 190–195 million square feet. The Nifty REITs & InvITs Index delivered 19.24% returns in the last one year.

REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) are SEBI-regulated pass-through vehicles that pool investor capital to own income-generating real assets — commercial offices, highways, power transmission lines, telecom towers, and shopping malls. Think of them as mutual funds for physical infrastructure: instead of holding stocks, the trust holds real assets and distributes rental or toll income to unitholders.

What makes them structurally significant is the mandatory distribution rule: trusts must deploy at least 80% of assets in operating, revenue-generating properties, and distribute 90% of Net Distributable Cash Flows (NDCF) quarterly. This makes them inherently income-focused instruments, unlike growth equities.

SEBI's January 2026 reclassification of REITs as equity instruments was a watershed moment. It opened the door for mutual funds and Specialised Investment Funds (SIFs) to increase exposure, and from July 2026, REITs can be included in equity indices — triggering passive ETF and index fund inflows automatically.

From an exam lens, SEBI Grade A candidates must understand: the 80/20 asset allocation rule, the 90% NDCF distribution mandate, tax treatment (STCG at 20% under 12 months; LTCG at 12.5% beyond ₹1.25 lakh exemption), and SEBI's evolving regulatory posture. The Avendus and Crisil reports anchor the current macroeconomic relevance of this topic for analytical MCQs.