The move is expected to significantly boost mutual fund participation, improve liquidity, and pave the way for index inclusion.

Embassy Office Parks REIT gained 1.11%, Mindspace Business Parks REIT rose 1.59%, Brookfield India Real Estate Trust REIT climbed 1.25%, Nexus Select Trust REIT advanced 2.03%, and Knowledge Realty Trust REIT added 1.74%.

The Sebi board on 12 September 2025 cleared amendments to the Mutual Fund Regulations, 1996, to reclassify REITs as equity while retaining the 'hybrid' tag for Infrastructure Investment Trusts (InvITs). Sebi noted that REITs are more aligned with equity in terms of structure and liquidity, making the reclassification consistent with global practices. InvITs, being largely privately placed with stable cash flows but limited liquidity, will continue under the hybrid category.

With this change, mutual fund investments in REITs will now be counted under equity allocations, enabling greater participation and potential inclusion in equity indices. At the same time, the existing investment limits that earlier applied to both REITs and InvITs will now be exclusively available for InvITs, fostering growth in that segment as well.

The decision followed public consultations held in April 2025 and discussions with the Mutual Fund Advisory Committee, industry associations, and stakeholders.