REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) are market-linked instruments allowing retail participation in income-generating real estate and infrastructure assets. SEBI regulates both through comprehensive frameworks since 2014. Recent amendments include relaxed lock-in periods, reduced net worth requirements for sponsors, and enhanced liquidity provisions. Embassy Office Parks became India's first listed REIT in 2019. Currently, 4 REITs and 15 InvITs are operational, managing assets worth over ₹2 lakh crores, providing steady dividend yields.

REITs and InvITs democratize access to traditionally illiquid asset classes by pooling investor funds to acquire income-generating properties and infrastructure projects. They operate as trusts with sponsors (developers/operators), trustees (regulatory oversight), and investment managers (day-to-day operations). SEBI's regulatory framework mandates 80% investment in completed revenue-generating assets, quarterly distribution of 90% net distributable cash flows, and strict governance norms. Recent SEBI amendments address market feedback: reducing sponsor lock-in from 3 years to 18 months for excess units, lowering minimum net worth requirements, allowing debt financing up to 25% of assets, and permitting investment in under-construction projects (maximum 20% for REITs, 10% for InvITs). These changes aim to enhance sponsor flexibility, improve liquidity, and attract more sponsors to list. The framework balances investor protection with market development, crucial for India's infrastructure financing needs and real estate sector formalization.