RBI Amends Valuation Norms for AIFI Investments in InvITs and REITs
The RBI has amended the rules regarding the classification, valuation, and operation of InvIT and REIT units within the investment portfolios of All India Financial Institutions (AIFIs). Listed InvITs and REITs will be valued in accordance with the RBI's existing norms for listed securities. Unlisted units will be valued based on the Net Asset Value (NAV) reported by the respective InvIT/REIT; however, if the NAV is unavailable or the units are infrequently traded, the value will be considered as ₹1. This amendment aims to bring clarity and uniformity to the valuation process, while existing RBI norms will continue to apply to other unlisted instruments.
The Reserve Bank of India (RBI) has amended the regulations governing the classification, valuation, and operation of Infrastructure Investment Trust (InvIT) and Real Estate Investment Trust (REIT) units within the investment portfolios of All India Financial Institutions (AIFIs). These changes have been introduced under the 'RBI (AIFI – Classification, Valuation and Operation of Investment Portfolio) Amendment Directions, 2026' and are effective from the date of issuance.
Valuation of Listed InvITs and REITs:
Under the revised framework, if InvIT or REIT units are listed, AIFIs must adhere to the RBI's existing norms prescribed for listed securities when valuing them. The objective is to appropriately incorporate the market-available price into the valuation process.
Framework for Unlisted InvITs:
If InvIT units are unlisted and market prices are unavailable, they will generally be valued based on the Net Asset Value (NAV) reported by the respective InvIT. If an InvIT fails to report its NAV in accordance with the SEBI (Infrastructure Investment Trusts) Regulations, 2014, or if the unit is 'infrequently traded' within the specified category, a valuation of ₹1 has been prescribed.
Similar Valuation Framework for REITs:
Unlisted REIT units will also be valued based on the NAV reported by the respective REIT. If a REIT fails to calculate and declare its NAV in the manner and frequency prescribed under the SEBI (Real Estate Investment Trusts) Regulations, 2014, the value of such units will be deemed to be ₹1. RBI’s regulations concerning listed securities will apply to listed REITs.
Impact on other unlisted instruments:
The scope of the amendment is limited to the valuation framework for REIT and InvIT units. For the valuation of other unlisted instruments issued by REITs or InvITs, AIFIs will continue to follow the existing RBI valuation methodology. Thus, the objective of the amendment is not to alter the entire REIT/InvIT structure but to bring clarity to the valuation of units.
Significance for UPSC:
This topic is important under GS Paper-III – Indian Economy, Banking & Financial Sector. UPSC aspirants should understand RBI’s regulatory role, AIFIs, InvITs, REITs, NAV, listed/unlisted securities, and the regulatory relationship between SEBI and RBI. An InvIT is primarily a trust structure linked to investments in infrastructure assets, whereas a REIT is primarily a vehicle for investing in income-generating real estate assets. This RBI amendment specifically pertains to valuation transparency, uniformity, and financial reporting.
