The Securities and Exchange Board of India (SEBI) on August 14, 2026, notified the Framework for Calculation of Net Distributable Cash Flows for InvITs.
The following has been stated:
• SEBI has amended Section F (Para 3.19) of Chapter 3 of the Master Circular for Infrastructure Investment Trusts (InvITs) dated July 11, 2025, based on industry representations, recommendations of the Hybrid Securities Advisory Committee (HySAC) and public consultation, to permit payments towards major maintenance expenses for road projects funded through external debt to be added back while computing Net Distributable Cash Flow (NDCF). The change applies both at the HoldCo/SPV level and Trust level. Such major maintenance expenditure shall relate to a road project under the “Roads and bridges” infrastructure sub-sector and shall be non-routine maintenance undertaken in accordance with the concession agreement.
• The add-back is subject to strict conditions, including prior unitholder approval, with at least 60% of votes cast in favour, for each project for which borrowing is proposed. The explanatory statement to the unitholder meeting shall disclose the projects/SPVs/HoldCos involved, categories and estimates of major maintenance expenditure, impact on the InvIT's future growth and leverage capacity, present and future impact on distributions, and alternative funding sources if debt is unavailable. Approval may be obtained on a one-time basis for the project lifecycle or for specific maintenance expenditure, while any deviation requiring additional debt will require fresh approval.
• Further, a statutory auditor's certificate is required to confirm that the expenditure qualifies as major maintenance under the concession agreement and that the payments were funded through external borrowings. The InvIT shall also disclose the borrowing undertaken for major maintenance separately in its Net Borrowing Ratio, financial results and periodic reports, along with project-wise/SPV-wise/HoldCo-wise outstanding debt for such expenditure. Debt maturity profiles shall also specifically identify borrowings raised for major maintenance. The amendment is effective immediately.
[Notification No. - HO/17/11/17(5)2026-DDHS-POD2/I/18791/2026]
