CIRCULAR

Investmentsin Debt Securities of InvITs and REITs

Investments-Master Circular permitsinsurers to invest in Units of listed Infrastructure Investment Trusts (InvITs)and Real Estate Investment Trusts (REITs). Consequent to Finance Act, 2021permitting Trusts to issue Debt Securities, the following conditions shallapply to Insurers investing in “Debt Securities” issued byInvITs / REITs:

a.  The Debt Instruments of InvIT / REIT shallbe rated and not less than “AA” as a part of ApprovedInvestments.

b. Debt Instruments of InvITs / REITs rated andor downgraded below “AA” shall form part of OtherInvestments.

c.  No insurer shall invest more than 10% of theOutstanding Debt instruments (including the current issue) in a singleInvIT/REITsissue.

d. The cumulative Investments in Units and DebtInstruments of InvITs and REITs shall not exceed 3% of total fund size of theInsurer at any point of time.

e.  No investment shall be made in Debtinstruments of an InvIT/REIT where the Sponsor is under the Promoter Group ofthe Insurer.

f.   Group shall have the meaning as definedunder Regulation 2(g) of IRDAI (Investment) Regulations, 2016

g.  Investment in Debt Instruments of InvIT willform part “Infrastructure Investments”.

h. Investment in Debt Instruments of REIT willform part of industry group “Real Estate Activities”under NIC Industry Classification.

i.   The Investment in Debt Securities ofInvITs/REITs shall be valued either as per FIMMDA or at applicable market yieldrates published by any Rating Agency registered with SEBI.

j.   The codes applicable under Category ofInvestment (COI) for Debt Instruments of InvITsand REITs are:

ApprovedInvestments

           i.    D42:Debt Instruments of InvITs - IDIT

         ii.    D43:Debt Instruments of REITs - EDRT

OtherInvestments

           i.       E31:Debt Instruments of InvITs - IOIT

         ii.       E32:Debt Instruments of REITs - ODRT

k. The Concurrent Auditor in his QuarterlyReport to the Audit Committee / Board of the Insurer shall specifically confirmcompliance to ALL the above norms.

Sd/-

(S. N. Jayasimhan)

HoD-Investments