RBI amends valuation norms for InvIT, REIT units for financial firms

The RBI has amended valuation norms for InvIT and REIT units held by financial institutions to ensure clarity. Under the new rules, unquoted units will be valued at NAV, but will be treated as Re 1 if the NAV is not disclosed as per SEBI norms.

The Reserve Bank of India Amendment Directions, 2026 have been issued on Tuesday to alter the valuation norms for units of Infrastructure Investment Trusts (InvIT) and Real Estate Investment Trusts (REIT) held by all-India financial institutions.

According to RBI, the revised framework updates Chapter VI of the Reserve Bank of India (All India Financial Institutions Classification, Valuation, and Operation of Investment Portfolio) Directions, 2025, which originally came out on November 28, 2025. The banking regulator stated that it introduced the changes to eliminate ambiguity and set standardized procedures across institutions.

"In order to ensure clarity and uniform practices in the valuation of units of Infrastructure Investment Trust (InvIT) and Real Estate Investment Trusts (REIT), there is a need to amend the extant instructions," the Reserve Bank of India stated in its official communication. The central bank explained that the amendments stem from powers granted under Section 45L of the Reserve Bank of India Act, 1934, alongside other applicable statutory provisions, after finding the step necessary in the public interest.

New Valuation Guidelines

The formal title of the revised rules is the Reserve Bank of India (All India Financial Institutions - Classification, Valuation, and Operation of Investment Portfolio) Amendment Directions, 2026, coming into effect immediately from the date of issue. Under the amended guidelines, two new clauses—Paragraph 58A and Paragraph 58B—stand inserted into the principal directions to govern instruments issued by InvITs and REITs respectively.

Quoted securities and units issued by either investment trust must be valued mutatis mutandis following the established instructions applicable to quoted securities. For unquoted units, the circular mandates valuation at net asset value, while stipulating strict treatment if disclosure rules are not met.

Valuation of InvIT Units

"Units: The valuation shall be done at the NAV as disclosed by the InvIT," the notification stated regarding unquoted units. "Where an InvIT fails to compute and disclose the NAV in the manner and frequency specified under SEBI (Infrastructure Investment Trusts) Regulations, 2014, the value of its units shall be treated as Re 1 for the purpose of these Directions," the document stated. "Such treatment shall also apply to the InvIT units classified as infrequently traded in terms of the aforementioned SEBI Regulations," the central bank noted.

Valuation of REIT Units

The Reserve Bank of India laid down identical valuation terms for unquoted real estate trusts under Paragraph 58B. "Units: The valuation shall be done at the NAV as disclosed by the REIT," the notification directed. "Where a REIT fails to compute and disclose the NAV in the manner and frequency specified under SEBI (Real Estate Investment Trusts) Regulations, 2014, the value of its units shall be treated as Re 1 for the purpose of these Directions," the text stated. "Such treatment shall also apply to the REIT units classified as infrequently traded in terms of the aforementioned SEBI Regulations," the central bank added.

For other unquoted instruments issued by either trusts, institutions must apply the standard methodologies defined earlier in the directions. (ANI)

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