All Infrastructure Investment Trusts (“InvITs”) All Parties to InvITs All Depositories All Recognized Stock Exchanges

**NDCF Computation at HoldCo/SPV and Trust Levels**: A new line item is added to allow the add-back of payments made towards major maintenance expenses for road projects to the extent funded by external borrowing (subject to Note 12). This applies to both the HoldCo/SPV level (Table S.No. I) and the Trust level (Table S.No. II). **Surplus Cash Distribution (Note 4 & 6)**: Surplus cash available due to a debt raise is generally excluded from distribution. However, surplus cash from payments made for major maintenance of road projects funded by external debt may be distributed subject to Note 12 and adequate disclosures. No Trust or SPVs can distribute cash flows by obtaining external debt, except as clarified in notes 2, 7, and 12 (excluding working capital/OD facilities squared off within the quarter). **Conditions for Add-Back (Note 12)**: **Road Project Definition**: Must be a project in the 'Roads and bridges' infrastructure sub-sector as mentioned in the Ministry of Finance notification dated September 19, 2025 (including any amendments or additions). **Major Maintenance Expense Definition**: Expenditure incurred on maintenance of a road project which is not routine maintenance and is in accordance with the obligations and requirements specified in the concession agreement. **Unitholder Approval**: Requires approval under Regulation 22(5) of the InvIT Regulations, where votes cast in favor must be at least 60% of the total votes cast. This must be undertaken for each project where borrowing is proposed. Approval can be on a one-time basis (for the entire project life cycle) or for specific expenses. Any deviations requiring additional debt require prior unitholder approval. **Explanatory Statement Disclosures**: The meeting notice must disclose project/SPV/Holdco names, categories of expenses, year-wise and project-wise estimates, growth impact (with a specific mandatory disclaimer regarding leverage headroom and cash flow availability), present/future distribution impact, and alternative funding options if debt is unavailable. **Auditor Certification**: A certificate from the statutory auditor must be obtained certifying that the expenses align with concession agreements and are funded by external borrowings. The auditor may rely on an independent expert. **Reporting Disclosures**: Financial results and reports (Annual, Half-yearly, Quarterly) must segregate major maintenance borrowing in the Net Borrowing Ratio, disclose aggregate and outstanding major maintenance debt in the NDCF statement notes, and highlight these borrowings in debt maturity profiles.

How do InvITs calculate NDCF for road maintenance?

Quick summary

SEBI has updated the Net Distributable Cash Flows (NDCF) framework for Infrastructure Investment Trusts (InvITs). The amendment allows InvITs to add back payments made for road project major maintenance expenses to the extent they are funded by external debt, subject to specific unitholder approvals, auditor certifications, and disclosure requirements.

Who is affected

All Infrastructure Investment Trusts (“InvITs”)
All Parties to InvITs
All Depositories
All Recognized Stock Exchanges

What changes

NDCF Computation at HoldCo/SPV and Trust Levels: A new line item is added to allow the add-back of payments made towards major maintenance expenses for road projects to the extent funded by external borrowing (subject to Note 12). This applies to both the HoldCo/SPV level (Table S.No. I) and the Trust level (Table S.No. II).
Surplus Cash Distribution (Note 4 & 6): Surplus cash available due to a debt raise is generally excluded from distribution. However, surplus cash from payments made for major maintenance of road projects funded by external debt may be distributed subject to Note 12 and adequate disclosures. No Trust or SPVs can distribute cash flows by obtaining external debt, except as clarified in notes 2, 7, and 12 (excluding working capital/OD facilities squared off within the quarter).
Conditions for Add-Back (Note 12):
Road Project Definition: Must be a project in the 'Roads and bridges' infrastructure sub-sector as mentioned in the Ministry of Finance notification dated September 19, 2025 (including any amendments or additions).
Major Maintenance Expense Definition: Expenditure incurred on maintenance of a road project which is not routine maintenance and is in accordance with the obligations and requirements specified in the concession agreement.
Unitholder Approval: Requires approval under Regulation 22(5) of the InvIT Regulations, where votes cast in favor must be at least 60% of the total votes cast. This must be undertaken for each project where borrowing is proposed. Approval can be on a one-time basis (for the entire project life cycle) or for specific expenses. Any deviations requiring additional debt require prior unitholder approval.
Explanatory Statement Disclosures: The meeting notice must disclose project/SPV/Holdco names, categories of expenses, year-wise and project-wise estimates, growth impact (with a specific mandatory disclaimer regarding leverage headroom and cash flow availability), present/future distribution impact, and alternative funding options if debt is unavailable.
Auditor Certification: A certificate from the statutory auditor must be obtained certifying that the expenses align with concession agreements and are funded by external borrowings. The auditor may rely on an independent expert.
Reporting Disclosures: Financial results and reports (Annual, Half-yearly, Quarterly) must segregate major maintenance borrowing in the Net Borrowing Ratio, disclose aggregate and outstanding major maintenance debt in the NDCF statement notes, and highlight these borrowings in debt maturity profiles.

Action items

Obtain unitholder approval with at least 60% votes in favor before adding back major maintenance expenses funded by external borrowing.
Include all mandatory disclosures (project details, expense categories, estimates, growth impact disclaimer, distribution impact, and funding alternatives) in the Explanatory Statement for the unitholder meeting.
Obtain a statutory auditor certificate (who may rely on an independent expert) certifying that the major maintenance expenses are in line with concession agreements and funded by external borrowings.
Update financial results and reports (Annual, Half-yearly, Quarterly) to segregate major maintenance borrowing in the Net Borrowing Ratio, NDCF statement notes, and debt maturity profiles.

Key dates-deadlines

August 14, 2026: The circular comes into force with immediate effect.
September 19, 2025: Reference date for the Ministry of Finance notification defining the "Roads and bridges" infrastructure sub-sector.

Source reference

SEBI Circular Reference: HO/17/11/17(5)2026-DDHS-POD2/I/18791/2026
Date: August 14, 2026
Source Website: www.sebi.gov.in