India IPO SM REIT Structuring & Listing Services

SM REIT Structuring & Listing Services

Empowering Mid-Sized Real Estate Sponsors to Unlock Capital through SM REITs

The mid-market real estate business in India is moving towards a new phase of capital efficiency. The launch of Small and Medium Real Estate Investment Trusts (SM REITs) in the SEBI 2024 regulatory framework provides a formal, listed channel through which asset-intensive real estate players can monetize income-generating assets without the need to divest assets fully or use complicated debt arrangements.

At India IPO, we specialize in designing and executing SM REIT issues end-to-end, ensuring full compliance with SEBI norms, structuring flexibility and complete support from ideation to listing.

What is an SM REIT?

An SM REIT is a regulated real estate investment structure under the Securities and Exchange Board of India (SEBI) where capital is pooled alongside shares against a portfolio of income-generating, completed real estate assets, the asset value of which is between ₹50 crore and ₹500 crore.

Key Features:

SPV ownership in the form of a Trust
The asset portfolio should be 95% complete and revenue-earning
SPVs can only be a 100 % entity of the SM REIT
A compulsory requirement for units to be listed on an exchange
No investment in under-construction assets permitted
The Sponsor and Investment Manager terms may be identical

India IPO's SM REIT Advisory Service

Our services are extensive and modular for the real estate companies that are willing to structure and list SM REITs as per the SEBI (REIT) Amendment Regulations, 2024.

1. Initial Assessment & Feasibility

Evaluation of the quality and yield attributes of the asset and lease in rent
Title verification and legal due diligence
Monetization and REIT structure financial modeling
Special Purpose Vehicle (SPV) Ready Assessment and Structuring Plan of an Entity

2. Structuring the SM REIT Entity

Drafting and registration of Trust Deeds under the Indian Trusts Act
Formation and registration of SPVs to hold property
Organization of the Investment Manager and Trustee Functions
Establishment of scheme-specific asset segregation

3. Regulatory & Compliance Execution

Drafting of the Offer Document and filing through a SEBI-registered Merchant Banker
Liaison with legal, financial and valuation professionals
Obtaining the SEBI and specified exchange approvals
Ensuring full compliance with:
- SEBI (REIT) Regulations, 2014
- SEBI (NCS) Regulations, 2021 (for leverage/debt)
- Companies Act, 2013

4. Appointing & Managing Key Intermediaries

Engagement of:
- SEBI-registered Trustee (not affiliated with IM)
- Independent valuer (5+ years experience in real estate)
- Custodians, Registrars & Compliance Auditors
Coordination for escrow, depository accounts and compliance infrastructure

5. Listing Preparation & Post-Issue Advisory

Listing of SM REIT units on NSE/BSE SME or REIT segment
Quarterly compliance and governance systems
Disclosure support, distribution processing and trust reporting
Lock-in management and valuation audit schedule

SM REIT Regulatory Conditions

Regulatory Parameter	Requirement
Asset Portfolio Value (Per Scheme)	₹50 crore to ₹500 crore
Investment Criteria	95% in completed revenue-generating assets; 5% in liquid unencumbered assets
Minimum Unit Price	₹10,00,000 per unit (demat form only)
Leverage Limit	Max 49% of scheme asset value (above 25% requires credit rating + approval)
IM Net Worth	₹20 crore (₹10 crore liquid net worth mandatory)
IM Experience	2 years in real estate/fund management or qualified KMPs with 5+ years each
Trustee Eligibility	Must not be associated with Investment Manager
Offer Timeline	The initial scheme is to be launched within 3 years of SEBI registration
Distribution Compliance	95% of SPV cash flows & 100% of scheme-level NDCF must be distributed quarterly
Valuation Reports	Annually + on material events, submitted to SEBI, Trustee and Exchanges
Lock-in Requirements	IM to hold 5%–15% of units initially; phased reduction over 20 years

Migration Support for FOPs & Pre-Existing Structures

In the case of current Fractional Ownership Platforms (FOPs) or privately pooled real estate structures:

India IPO offers migration counseling, documentation and compliance filing
Compulsory implementation of SEBI within 6 months of the date of the regulation
Current unitholders may be converted into SM REIT schemes
Conversion support involves the establishment of new SPVs, the transfer of assets and the restructuring of investors

Governance, Lock-in & Related Party Controls

A trustee is a custodian of property on behalf of scheme unit holders
The initial unit holding of IM is locked at leverage choice (5%-15%)
No related party transactions allowed (except IM/Trustee fees)
Annual meetings and quarterly financials are required
There are clear voting thresholds on major actions (e.g. borrowing, change in IM, asset transactions)

Build Your SM REIT with Confidence

India IPO is your strategic advisory partner and we will take you through all the stages of SM REIT issuance, including feasibility, listing and long-term governance. As a developer, asset manager, FOP, or sponsor, we assist you in designing capital markets-ready platforms that scale and sustain.