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Introduction.

The Master Circular for Infrastructure Investment Trusts (InvITs) issued by Securities and Exchange Board of India (SEBI) prescribes the format for calculating the Net Distributable Cash Flows (NDCF) by InvITs as well as by its Special Purpose Vehicle (SPVs). Under the existing calculation method, major maintenance expenses for road projects funded through external borrowings are treated as operating expenses under accounting principles hence such expenses reduce the NDCF.

SEBI has come up with a consultation paper which proposes a solution to this practical challenge. In this newsletter, we shall understand the proposal discussed in this consultation paper dated 1^st June 2026[1] and impact of the proposal if made effective.

Proposed change in NDCF Calculation.

As per present formula, the calculation of NDCF begins from net operating cash flow and thereafter line items are added and deducted from such cash flow to arrive at NDCF amount. Since major maintenance expense funded through borrowing is treated as operating expense, it is already reduced while arriving at cash flow from operating activity.

Now it is proposed that, InvITs and their SPVs/HoldCos shall be allowed to add back to cash flow from operating activity, payments made towards major maintenance expenses for road projects to the extent such expenses are funded through external borrowings while calculating NDCF.

Point to be noted is that, this new calculation method will be relevant only to InvITs involved in road projects.

Safeguard mechanism

Considering the direct and complicated impact of this treatment on distributions made to investors (unit holders), this proposed calculation method is subject to certain conditions.

• Unit holder approval: This expense shall be added back to cash flow only after obtaining approval from unit holders with a majority of more then 60% votes. The consultation paper also provides the list of items which should be included in the explanatory statement to be sent to unitholders along with notice of meeting approving this proposal.
• Certificate from statutory auditor: A certificate from the statutory auditor confirming that the expenditure qualifies as major maintenance expenditure and has been funded through external borrowing would be mandatory.
• Disclosure requirements: the InvITs/SPVs/Holdcos will have to show the borrowing raised and outstanding as on date for MM expense separately in notes to NDCF and while calculating net borrowing ratio. Also disclosures are to be made in the Annual, Half yearly, Quarterly Report of the InvIT.

Impact of proposed norms.

From an investor’s perspective, this proposal is a double-edged sword that demands careful scrutiny beyond the headline distribution number. While the proposal is expected to provide greater stability in distributions by allowing debt-funded major maintenance expenses to be added back while computing NDCF, investors should carefully assess the quality and sustainability of such distributions. A higher NDCF may not necessarily indicate improved operating performance of the underlying road assets; rather, it could reflect the benefit of additional borrowing undertaken for major maintenance obligations. Investors should therefore look past the reported NDCF yield and focus on three things:

1. first, the quantum and repayment schedule of MM debt already availed or proposed, since this directly maps to how long and by how much future distributions will be subdued;
2. second, the adequacy of the explanatory statement placed before unitholders for approval, particularly the year-wise and project-wise MM expense estimates verified against the latest valuation report; and
3. third, the Net Borrowing Ratio post-MM debt, as this debt consumes leverage headroom that would otherwise fund portfolio acquisitions and growth, potentially impacting the long-term NAV of the InvIT.

For road InvITs and their investment managers, the proposal resolves a long-standing structural mismatch between accounting treatment and economic reality. Since major maintenance obligations are inherent to toll road concessions and often involve substantial expenditure at periodic intervals, the current framework can depress projected cash distributions during maintenance years, thereby affecting asset valuations and bid economics. By permitting debt-funded major maintenance expenditure to be added back while computing NDCF, the proposal could enhance the attractiveness of road assets for InvIT structures and facilitate monetisation by sponsors. However, InvITs would need to carefully balance the benefit of higher distributable cash flows against the increased leverage arising from such borrowings, as debt raised for major maintenance would consume part of the borrowing capacity that may otherwise be available for future acquisitions, expansions, or strategic growth initiatives. Further, InvITs must recognise that this flexibility comes with heightened governance obligations: the 60% unitholder approval threshold, statutory auditor certification for each MM event, and granular disclosures in quarterly, half yearly and annual reports will raise the bar for transparency.

Conclusion.

The proposal provides relief to road sector InvITs by recognising the unique nature of major maintenance expenditure and its financing requirements. While it may improve distributable cash flows, SEBI has balanced the relaxation with unitholder approval, auditor certification and enhanced disclosure requirements to safeguard investor interests. The last date for giving comments to SEBI on the consultation paper issued in this regard is 22^nd June 2026

[1] https://www.sebi.gov.in/reports-and-statistics/reports/jun-2026/consultation-paper-on-review-of-framework-for-calculation-of-net-distributable-cash-flows-for-invits_101725.html

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Introduction

Regulation 20 of Infrastructure Investment trust regulations 2014 (InvIT regulations 2014) regulates borrowing of funds by InvIT. Sub-reg (3)(b)(ii) of reg 20 prescribed that the funds borrowed in excess of 49% of total InvIT assets should be used only for acquisition or development of infrastructure projects. However, through an amendment dated 17^th April 2026, SEBI modified the language of the said sub-clause and as a result, SEBI was empowered to prescribe additional purposes for which the borrowed funds above 49% can be used.

In exercise of this power, SEBI has prescribed certain additional end uses of the borrowed funds in excess of 49% through a circular dated 15^th May 2026. In this write up we shall try to understand these end uses

Specified end uses

SEBI through Circular dated 15^th May 2026 has specified 2 purposes for which borrowed funds can be used. They are as under.

1. Capital expenditure made to enhance asset performance or for capacity augmentation;

2. Major maintenance expense in respect of Road Project,

3. Refinancing of debt, by the InvIT, SPV or Holdco, subject to the following conditions:

(a)the original debt which is being refinanced was utilized for the purposes permitted under Regulation 20(3)(b)(ii) of the InvIT Regulations;

(b)only the principal portion of debt is refinanced i.e. any accumulated interest or any charges or fees by whatever name called shall not be refinanced.

Other then this, the circular also clarifies the meaning of major maintenance expense and road project in following words.

“Major maintenance expense shall mean expenditure incurred on maintenance of road project which is not routine maintenance and is in accordance with the obligations and requirements specified in the concession agreement;”

“Road Project shall mean a project in the ‘Roads and bridges’ infrastructure sub-sector as mentioned in the notification of the Ministry of Finance dated September 19, 2025 and shall include any amendments or additions made thereto.

Effective date of amendment

The amendment dated 17^th April 2026 modifying reg 20(3)(b)(ii) has already become effective and the circular also clarifies that it shall come in to effect immediately hence the funds borrowed hence forth by InvITs can be used for undertaking major maintenance of road projects or refinance of existing borrowing etc.

Conclusion

The amendment and the subsequent circular are likely to provide greater operational and financial flexibility to InvITs, especially in sectors such as roads where periodic major maintenance is an important part of asset management. The express recognition of refinancing as a permitted end use may also help InvITs in better debt management and reduction of financing costs while conditions prescribed for refinancing ensure that the additional flexibility is not misused for purposes beyond those originally permitted under the regulations. Overall, the changes indicate a gradual expansion of the permitted utilization framework for InvIT borrowings while continuing to retain regulatory safeguards on the use of leveraged funds.

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Darwin says, ‘survivor of fittest’ and history tells us that civilisations and cultures sustain much longer than an individual or kingdom or religious supremacy. Survival is biology. Sustainability is strategy. Similarly, when we see if we see organisations / institutions, longevity and success in business is not luck; it is disciplined alignment with purpose. And Indian corporate laws provide that design which can facilitate and even push for strategy which will lead to sustainable success.

In last 2 decades number of companies which have successfully got listed have been increasing consistently viz. from 48 in 2007 to 372 in year 2026. Overall market capitalization of Indian corporates have increased from ~1,01,49,290 Crore in FY 14-15 to ~4,13,75,586 Crore in FY 24-25, so wealth creation engine via companies going for listing is amazing contributor for India Growth story. India’s growth story is not written in GDP numbers alone; it is written in listed companies. Our Prime Minister has kept goal of Vikasit Bharat by 2047 i.e. GDP of USD 30–35 trillion, this will need market cap of listed companies to minimum ~₹3,400 Lakh Crore which is 8-9 times more than today. There is no doubt in mind of anyone that if India has to grow, entrepreneurship and number of successful companies is the major lever for achieving this.

But growth is never a straight line; it is a battle between upward forces and downward pulls. Success depends on one equation: strengthen what lifts you, weaken what pulls you down.

Number of companies which were dragged in insolvency has also been significant 8833[1] and almost 8-10% top 500 companies went through IBC in last 10 years. Companies don’t fail in one moment, they drift away from discipline and markets don’t reward the biggest companies, they reward the most consistent ones.

My belief and experience is if regulations are followed in spirit, it gives strength and will lift the company up. From this context, successful IPO is not just capital raising, but character revealing. Listing is not an event; it is a transformation.And preparing for IPO and adopting regulations in right manner plays a very strategic role for corporates to assure sustainable success for corporate and every stakeholder. This is need of nation. In this article we are sharing some elements which contribute to sustainable success.

1. Investor engagement/ making yourself attractive for investors

Stock market works on future pricing. Stock Market likes consistency. Stock market like transparency[2], stock market expects respect[3], stock market expect best in class, stock market likes evolved corporates[4]. Stock market expects discipline. The stock market doesn’t just price your business, it judges your behaviour.

Management has to mature to a role and to a mindset where they appreciate that they cannot assume public shareholders and they need to be disclosed whatever is necessary to take them informed decision. Whatever needs their approval cannot be circumvented. Once listed, the company stops belonging to the promoter and starts belonging to trust.

Investors needs sustainable growth either through promoter or someone who is most appropriate at that pace for the company. And therefore, after listing, corporation cannot be considered as alter ego of a promoter but a separate identity. Ego builds companies, but governance sustains them. Therefore ability to have meaningful engagement with investors and to earn qualities, culture, practices, processes, systems and performance that will keep attracting investors at attractive pricing is essential.

2. Resource mobilisation and Deployment

Those companies who go for road show learn so much about their business which they would otherwise not learn even if they spend years in their business. Roadshows don’t just attract investors, they expose blind spots.

Capital markets are not just funding platforms, they are capital allocation judges. If we see distribution of capital across industries has been changing

Table 1: Capital Deployment across industries[5]

Listing and capital market provides continuously evolving framework for effective capital deployment and discipline in its utilisation. Smart capital flows to clear thinking and you will sustained companies have adopted to these expectations and maintained their share in capital market. Success of fund raise is directly proportional to objects of the issue and therefore smartest people on earth decide the capital allocation and retail market follows that. Further, it requires quarterly monitoring and reporting to public about utilisation[6].

One of the reasons why Indian capital market lagged globally is because of multiple factors, but few important factor are our inability to create alternate source for energy and lack of speed and focus on AI[7]. In short, if you want to be ahead of curve in business you need to invest funds at right source and Your investors are your most honest performance dashboard.

3. Discipline

“Success is nothing more than a few simple disciplines, practiced every day.” – Jim Rohn

In fact, being compliant is nothing but being disciplined. Many corporates avoid listing because they are afraid about compliance and compliance cost. Undisciplined success is temporary. Disciplined systems create permanence. Listing forces discipline, resisting it invites decline.

Being listed requires complete mapping of business with confidentiality, disclosure and monitoring conflict of interest across width and breadth. This puts very high level of engagement, alignment and discipline. This one virtue requires to be acquired by any corporation which wants to list. Without this virtue even if any entity lists, it runs a risk of heavy non-compliance which can even put the survival at stake and if mastered, this can guarantee long term and sustainable success.

Be it compliance of related party transactions[8], or related to senior management[9] on boarding or mapping of price sensitive information across organisation[10], putting perfect systems for seamless flow of information across organisation and putting adequate controls and levers to ensure speed of decision with adequate risk mitigation[11] is so critical for successful organisation and listed compliances exactly expect this. These processes and discipline to follow this requires compliance/ regulatory teams, embedding these aspects in every job descriptions and evaluations, investment in systems / processes and review. And while recognising and rewarding the performers any non-performance needs to be tracked and punished ruthlessly. In last 20 years ~13000[12] companies/ individuals got penalised by stock exchange or by SEBI and there are ~7,500+ number of listed companies, this proportion speaks volume about expected disciplined by a listed company in India. Ultimately, we are not running a proprietary concern but a large corporate. What you don’t monitor will eventually control you.

4. Risk

Between success and sustainable success there is one fulcrum which decides the direction, that is risk identification, management and mitigation.

Corporate laws are so vocal about risk[13]. In fact, if there is frequent movement or instability in chief risk officers, price and trust on that corporate impacts. One biggest risk for any corporate is about having weak financial controls and low engagement of auditor vis a vis board of directors. NFRA has been empowered in recent time to come out with more directions on this[14]. Whistle blower, vigil mechanism and protection of whistle blowers has been agenda of regulators and for a evolved corporate it requires strong structure around this[15]. For being listed mastering these aspects is so crucial. Risk based approach of working is so crucial for sustainable success that risk is a subject in almost every graduation and post-graduation. If we want to reduce power of forces which will pull performance of company down, focus on risk is crucial. In recent time when there was accident in one manufacturing facility there was discussion about role of risk committee of that company[16], if corporates are able to invest and prioritise and manage risk appropriately, it will definitely create sustainable wealth for investors. Risk ignored doesn’t disappear, it compounds silently. A weak control environment is a delayed crisis.

5. Conflict of interest

“All great empires die from within.” — Terry Bradshaw

In history we will see several examples of decline of any business or any empire is because of conflict of interest of the ruler/ decision maker. Lack of discipline in handling any conflict of interest is biggest spoiler.

Corporate law has mechanism to map every conflict of interest be at supplier level or customer level[17], or at senior management level[18] or at director level or at investor level[19]. LODR very nicely balances material and non-material conflict of interest. While every transaction with entity where there is some conflict of interest is required to be approved by independent directors only[20] that too only after receiving full and relevant details[21], when it comes to high value transactions involving conflict of interest it can be approved by shareholders who do not have any conflict of interest[22]. This is so strict that out of all such approvals 20% transactions were recommended to be voted against by proxy advisors and 2% transaction could not go through because of this framework in last 5 years. This framework gives so much confidence about robust mechanism to regulate conflict of interest. In last 9 years there are 4 to 5 amendments in regulations which deal with conflict of interest.

Such discipline makes it clear that regulator is very alert and strict about these aspects. In fact, if not followed properly it can trigger debarment of directors from acting as director in that and other companies for five years[23].

This encourages corporate to devise structures which does not have conflict of interest or transactions should be convincible for investors to vote in favour of such transactions. The market forgives mistakes not misalignment.

6. Inclusiveness

Jesse Jackson says “Inclusion is not a matter of political correctness. It is the key to growth.” And Magic Johnson says “The way to be successful is find a way to be inclusive of everybody…” In short without being inclusive, success and sustainable success is not possible and LODR exactly expects this from listed companies. Any culture which is exclusive cannot sustain long.

In fact, LODR not only insists corporates to adopt policies which will facilitate inclusiveness[24], it also insist disclosure of inclusiveness in its annual report[25]. ESG rating declared by ESG Rating agencies indicate how inclusive an organisation is. More and more money, more aware customers and more talented manpower and government subsidies and recognition is not possible without corporation being inclusive. These frameworks requires adopting best practices and because of overall push and pull from investors and regulators corporates will have to become inclusive and they have to ensure that perception is also matching with this. Talent, capital, and trust flow towards inclusive organisations. Exclusivity limits scale: inclusivity multiplies it.

7. Confidentiality, Transparency and Communication

“Don’t speak until its done” this is the simple thumb rule of SEBI Prohibition of Insider Trading Regulations, 2015. Once you are listed a company and its every connected person has to master this science of maintaining confidentiality till event occurs and then complete transparency upon happening of event. This is a habit changer for many corporates. But it is sign of evolved business and person. In last 7 years ~40 companies and ~100 individuals have been penalised by regulator for this violation and total penalty levied is ~36 Crore Rupees.

If any news is published before the formal disclosure done by the company then company has to respond to this immediately[26]. While communication with companies may want to talk liberally about good news, tendency is to speak less about bad news. Once you are listed, you are supposed to be like सुखदुःखे समे कृत्वा लाभालाभौ जयाजयौ II2.38II of Bhagwat Gita. This means whether news is good or bad we should be indifferent and we should see both from equal distance. This is sign of very evolved, fearless and detached persona. When it comes to peace and excellence this is a sign of epitome. Corporates have to earn this before going for listing. Listed companies will have to develop mechanisms to engage and communicate effectively with stakeholders so that news/ announcements are not interpreted to create dis proportionate consequences. Company needs to invest well in communication and investor / public relations.

8. Wealth creation models

Your ability to run business and make profit gives you X and stock listing can give you 10/20/30/50 X for the same profit[27]. Business creates profits. Markets create wealth. Listing converts performance into multiples. The biggest wealth creation engine is not earnings, it is valuation. Shares of a good listed entity is amazing wealth which you can pass on to your successor.

Likewise for employees also ESOP is amazing wealth creation enabler. In fact, ESOPs are no longer merely incentive tools but have become meaningful wealth creators e.g. Vedanta Ltd. alone has reported over ₹2,500 crore of employee wealth creation through ESOPs over a five-year period, reflecting the scale at which value can be shared with employees. Plus, best part is compensation is done by the market and not by the company. ESOPs don’t just compensate employees, they align destinies.  And therefore, coming out with ESOP scheme for employees before listing OR aligning family for share ownership and distribution post demise of founder promoter is very crucial. Many promoters keep their successor tied together via family trusts. As per Prime Database, as on October 2025, among the 2,757 companies listed on the NSE, promoters of ~880 of these companies hold their shares through different trust structures- private, public or Family Trust. This is a great enabler for keeping company control intact while retaining economic benefits for successors. This needs to be mapped before listing and post listing this can create wealth for everyone.

9. Proprietary /Arbitrary approach to Policy based Approach

Put together Companies Act and LODR requires listed companies to adopt ~26 policies ranging from policy related to manpower – compensation – reward – succession – diversity TO policies monitoring conflict of interest or policies on investment and risk mitigations etc. This speaks volumes. This insists corporates to be able to frame long term views and positioning and to be thoughtful about their choices.

Proper framed policies develop culture, give autonomy, cultivates speed with thoughtfulness and alerts about expectations of various stakeholders.

Policies help corporates to maintain alignment of every stakeholders towards corporate vision-mission-goal-values. Policies also provide framework which will make job of executors seamless and increases accountability of every stakeholder.

Policies if weaved properly can be effective replacement of most brilliant and evolved human beings with a very common man at execution level. This is amazing tool and corporate laws expect migration of corporates from arbitrary/ proprietary decision making to policy-based functioning. Number of courses available on policy making in management schools are increasing and this clearly indicates need of Indian corporate world.

10. Moving towards evolved and responsible corporate

GOAL of any organisation is to make profit today and all the time in future and LODR and companies act if implemented in letter and spirit actually promises this. It is a role of company secretary not just to ensure the compliances are done but also to ensure that it is implemented in a manner which transforms company into very evolved corporate.

Conclusion

Whether you list or don’t list, imbibing these highest level of polices, practice, processes, culture and attitude makes any company and its ecosystem a very matured, efficient, effective and sustainable. Listing is optional. Maturity is not.  Sustainable success is not achieved by chance, but by design. Regulation is not a burden; it is a blueprint for excellence. Great companies don’t comply with laws; they evolve through them. Role of company secretary is not just to ensure compliance but to ensure that true benefit of these regulatory expectations transform those companies into a evolved organisation which sustains for hundreds of years

[1] Care ratings IBBI data .

[2] There are almost 37 TYPES of disclosures required under reg. 30 and approx. 61 types of disclosures under LODR

[3] Listed cos generally quarterly calls after publication of fin. Results. They also conduct quarterly calls post disclosure of significant events.

[4] There are some index such as ESG ratings by NSE (https://www.nse-esgrating.com/esg-ratings ), BSE 100 ESG Index, S&P ESG India Index etc, which  and S&P BSE 100 ESG Index. These indices help investors identify ethical firms, promote better corporate governance, and attract sustainable capital.

[5] IBEF 

[6] Reg 32 of LODR provides for quarterly updates on statement of utilisation of funds raised through public issue. Monitoring agency report is also provided if fund raising exceeds

[7] India’s crude oil import dependence (~87–88%), coupled with a fossil fuel–dominated energy mix, underscores a structural reliance on external energy sources despite ongoing transition efforts.
(Source: Energy Statistics India 2026, MoSPI) .

https://www.niti.gov.in/sites/default/files/2023-03/National-Strategy-for-Artificial-Intelligence.pdf

[8] Regulation 23(4) of SEBI (LODR) Regulations, 2015

[9] Regulation 17A (1) of SEBI (LODR) Regulations, 2015

[10] Regulation 3(5) of SEBI (PIT) Regulations, 2015

[11] Regulation 21(4) of SEBI (LODR) Regulations, 2015

[12] Orders of SEBI chairperson/members, orders of SEBI AO and Quasi-Judicial Authorities from 1 January 2020 to 22 April 2026

[13] section 134 of cos act, 2013 and Reg 21 of LODR, Reg 34 of LODR

[14] Corporate Laws Bill 2026 arms NFRA with sweeping enforcement powers, penalties

[15] Reg 22 of LODR provides for listed entity to formulate a vigil mechanism / whistle blower policy for directors and employees to report genuine concerns.

[16] The National Green Tribunal, in In re: Gas Leak at LG Polymers (2020), found prima facie failure of safety systems and imposed strict and absolute liability on the company, directing deposit of ₹50 crore and constituting a high-level committee to examine lapses and preventive measures.

[17] 2(1)(zc)(ii) of LODR defines related party transactions to mean a transaction between listed entity and any other person or entity on the other hand, the purpose and effect of which is to benefit a related party of the listed entity or any of its subsidiaries.

[18] Reg. 26 (3) and (5) of LODR

[19] Reg 26 (1), (2) and (3) of LODR

[20] Members of audit committee who are independent director shall approve related party transactions.

[21] RPT ISF June 2025: management of listed entity shall provide information in format specified in RPT Industry Standards.

[22] Regulation 23(4) of LODR: no related party shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not

[23] Section 164 of the Companies Act, 2013

[24] Regulation 17(1)(a) of SEBI (LODR) Regulations, 2015

[25] Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015

[26] Regulation 30(11) of SEBI (LODR) Regulations, 2015 read with Point 4 of Sch A of SEBI PIT Regulations: Prompt dissemination of UPSI that gets selectively disclosed.

[27] P.E of Sensex is 21.63 – BSE website

This article is published on taxmann link below.

https://www.taxmann.com/research/company-and-sebi/top-story/105010000000028367/positioning-ipos-strategically-long-term-success-mantra-opinion

The post Positioning IPOs strategically: Long Term Success Mantra first appeared on MMJC.

Introduction  

Securities and Exchange board of India (SEBI) had amended the Infrastructure Investment Trust Regulations 2014 (InvIT regulations) through an amendment notification dated 17^th April 2026. Through this amendment, SEBI had clarified that the Special Purpose Vehicles (SPV) with expired or terminated concession agreements would also be considered as SPVs subject to certain conditions. However, the said conditions were not specified in the said amendment notification.  

Hence SEBI has now come out with the said conditions through a separate circular dated 15^th May 2026. This circular prescribes 2 conditions for treating companies/LLP with expired concession agreement as SPV. In this article we shall understand these conditions and implications thereof.  

Conditions prescribed under circular  

Through amendment dated 17^th April 2026, a proviso was inserted in the definition of SPV prescribed under reg 2(1)(zy) of InvIT regulations. As per this proviso, a SPV who has no infrastructure project  due to termination or expiry of concession agreement can also be treated as SPV subject to certain conditions specified by SEBI.  

The SEBI has specified following 2 conditions through circular dated 15^th May 2026.  

1. “The Investment Manager shall either exit investment in such SPV by way of sale / liquidation / winding-up / merger of such SPV, or acquire any new infrastructure project in such SPV, within one year from –  

(a) completion/termination of concession agreement or such other agreement of similar nature, or  

(b) conclusion of all pending claims/litigations/tax assessments and related appeals, or  

(c) completion of defect liability period,  

whichever is later.”  

AND  

2. “Till the time investment in such SPV is held by the InvIT, adequate disclosures shall be made in the annual report of the InvIT including the following –  

(a) InvIT Level: The Investment Manager shall disclose a detailed breakup of the value of investments (gross and net basis) in the SPV(s) wherein the concession agreement or such other agreement of similar nature has ended/terminated.  

(b) SPV Level: The Investment Manager shall provide additional disclosures pertaining to each SPV wherein the concession agreement or such other agreement of similar nature has ended/terminated, which shall include the following information:  

(1) Brief details of the project, date when such agreement ended and status of vesting certificate or any other document issued by the concessioning authority upon successful completion of handover of the project to the said authority.  

(2) Assets and Liabilities of the SPV (including specific reserves, if any): Provide the nature and amount of respective carrying value of assets and liabilities (including specific reserves, if any) on broad/grouped basis as determined in the annual audited financial statements of the SPV.  

(3) Contingent Liabilities: Details of Contingent Liabilities of the SPV as set out in its annual audited financial statements.  

(4) Debt Repayment: Brief details of outstanding debt of the SPV, if any, along with repayment schedule.  

(5) Whether SPV has sufficient assets to meet its liabilities (including contingent liabilities). If not, how such liabilities are planned to be met.  

(6) Exit Strategy and Timeline: A clear plan of action detailing how and when the InvIT intends to exit its investment in the SPV or plans to acquire new infrastructure project, along with the brief details of steps taken so far and expected timeline for completion.  

(7) Other Material Details: Other material details related to such SPV including details related to pending claims, pending litigations, pending assessments, pending statutory/contractual obligations, balance period of defect liability period, etc.”  

Analysis of conditions  

The first condition aims at solving the practical difficulty faced by InvITs in immediately exiting the investment in SPV due to pending claims, litigations, and other such matters. This condition prescribes a timeline within which the investment must be exited post settlement of all such contingent matters. Also, the condition provides multiple options for exiting investment and the circular also clarifies that the time taken in obtaining regulatory approvals in mergers/winding up/liquidation etc. would not be counted in the period of one year.  

Second condition provides a mechanism to ensure transparency through appropriate reporting to unit holders about the financial impact of holding investment in SPV with expired concession agreement and the exit plan for withdrawing such investment. This condition aims to ensure investor protection in the backdrop of practical changes made to bring ease of doing business.  

Points to be considered  

As per the second condition, the InvITs have to give detailed information relating to SPV with expired concession agreement in the annual report of InvIT. Since the circular is effective immediately, this information needs to be given in the annual report of Financial Year (FY) 2026 which is now in the process of finalization.  

As per regulation 23 of InvIT regulations, the annual report must be submitted till 30^th June. Now we are already standing in the month of May. Hence InvITs are in the process of finalizing their reports. In such a situation, if any InvIT has investment in any such SPV whose concession agreement has expired, it will have to first collate all the information listed in the circular and then will have to include the same in the annual report. Considering the shortage of time due to approaching last date, this may prove to be a tedious task. Also, the InvITs through their investment managers will have to finalize an exit plan with specified timelines as it has to be disclosed in the annual report as per the circular.

Conclusion  

The conditions prescribed by SEBI through the circular are not a total surprise, as they were already proposed through consultation paper dated 5^th February 2026, which proposed amendments to Invit regulations. Further, considering the ease of functioning this amendment and the subsequent circular is expected to bring, there should not arise any difficulty in its compliance.

The post Compliance Pertaining to Status of SPV with Expired Concession Agreements – SEBI Circular dt: May 15, 2026  first appeared on MMJC.

Who influenced rather than dictated?
Who owned the outcome and not just the process?
Who leveraged fear, anger, pride, ego, loyalty, and every human emotion for an ultimate, pre-determined outcome?

We all know who that was.

When you look closely, Lord Krishna stands out as perhaps the finest project manager of all time.

So, what were those timeless leadership, stakeholder management, risk anticipation, narrative-building, and execution attributes in Krishna that continue to stand the test of time?

This carousel is a reflection on exactly that.

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