SEBI consultation on rationalisation of borrowing and leverage framework for InvITs
SEBI has issued a consultation paper proposing rationalisation of the framework governing borrowings and leverage by Infrastructure Investment Trusts (InvITs), with a focus on improving financial flexibility while maintaining investor protection.
The proposals seek to permit greater use of fresh borrowings by InvITs subject to prudential safeguards, strengthen disclosure requirements relating to leverage, debt maturity profiles and use of proceeds, and enhance the role of trustees and boards in overseeing borrowing decisions. SEBI has emphasised that any increase in leverage must be accompanied by robust governance controls, transparent disclosures and clear board-level accountability to ensure that long-term cash flow sustainability and unit-holder interests are not compromised.
