SEBI has issued this circular pursuant to an amendment dated April 17, 2026 to Regulation 2(1)(zy)(ii) of the SEBI (Infrastructure Investment Trusts) Regulations, 2014. The amendment clarified that the conclusion or termination of a concession agreement does not strip an SPV of its SPV status. This circular now specifies the conditions Investment Managers must fulfil to maintain that status.

Key Points

• Conclusion or termination of a concession agreement no longer automatically removes an entity’s classification as an SPV under InvIT Regulations (amendment effective April 17, 2026).
• Investment Managers must either exit the investment in the affected SPV or acquire a new infrastructure project within the SPV within one year of the triggering event.
• The one-year clock starts from the latest of: (a) completion/termination of the concession agreement, (b) conclusion of all pending claims/litigations/tax assessments and appeals, or (c) completion of the defect liability period.
• Time spent obtaining statutory or regulatory approvals for exit is excluded from the one-year timeline.
• Comprehensive disclosures must be made in the InvIT’s annual report for as long as the investment in such an SPV is held.

Regulatory Changes

Regulation 2(1)(zy)(ii) of the SEBI (InvIT) Regulations, 2014 was amended on April 17, 2026 to add a proviso stating that the conclusion or termination of a concession agreement (or similar agreement) shall not affect an entity’s status as an SPV, subject to conditions specified by SEBI. This circular operationalises those conditions.

Compliance Requirements

Exit or Re-deployment (within one year):

• Investment Manager must exit via sale, liquidation, winding-up, or merger of the SPV, OR acquire a new infrastructure project within the SPV.
• The one-year period is measured from the latest of: concession agreement end, conclusion of all pending claims/litigations/tax assessments, or end of defect liability period.
• Approval-seeking time for exit is excluded from the one-year window.

Annual Report Disclosures (InvIT Level):

• Detailed breakup of investment value (gross and net) in SPVs where the concession agreement has ended/terminated.

Annual Report Disclosures (SPV Level) — per affected SPV:

• Brief project details, date the agreement ended, and status of the vesting certificate or handover document from the concessioning authority.
• Assets and liabilities (including specific reserves) on a broad/grouped basis from the annual audited financial statements.
• Contingent liabilities as set out in the audited financial statements.
• Outstanding debt details and repayment schedule.
• Assessment of whether SPV assets are sufficient to meet liabilities (including contingent), and if not, the plan to meet them.
• Exit strategy and timeline: a clear action plan detailing how and when the InvIT intends to exit or acquire a new project, steps taken so far, and expected completion timeline.
• Other material details: pending claims, litigations, assessments, statutory/contractual obligations, and balance period of defect liability.

Important Dates

• April 17, 2026: Amendment to Regulation 2(1)(zy)(ii) of SEBI (InvIT) Regulations, 2014 came into effect.
• May 15, 2026: This circular issued, specifying the conditions Investment Managers must fulfil.
• One year from triggering event: Deadline for Investment Manager to exit or re-deploy SPV investment (triggering event is the latest of concession agreement end, conclusion of pending disputes, or end of defect liability period).

Impact Assessment

This circular provides regulatory certainty for InvITs holding SPVs whose concession agreements have expired or been terminated — a scenario common in road, highway, and other infrastructure projects with finite concession periods. Previously, the status of such SPVs post-agreement was ambiguous. The one-year exit/re-deployment window gives Investment Managers operational flexibility while preventing indefinite holding of shell SPVs. The detailed disclosure requirements enhance transparency for unitholders regarding residual risk, contingent liabilities, and management’s exit plans. The practical impact is moderate: it affects only those InvITs with SPVs at or near the end of their concession periods, but for those entities, compliance obligations are substantial.