hBits Set to Roll Out ₹500 Crore SM REIT by June 2025, Following SEBI Approval

hBits, a platform specializing in fractional ownership of premium office spaces, has received a license from the Securities and Exchange Board of India (SEBI) to launch a Small and Medium Real Estate Investment Trust (SM REIT). The company aims to raise up to ₹500 crore through an Initial Public Offering (IPO) by June 2025, making it the country’s second SM REIT to receive regulatory clearance.

This move marks a major milestone not only for hBits but also for the broader segment of retail real estate investment in India. SM REITs are a new category introduced by SEBI in March 2024 to regulate fractional ownership platforms (FOPs) and bring them under a formal investment framework. The SM REIT mechanism is tailored for real estate assets valued between ₹50 crore and ₹500 crore, and provides a clear, transparent structure for investors to participate in real estate markets with smaller ticket sizes.

According to hBits, the IPO will help transform the company’s existing structure and strategy. It plans to migrate its current portfolio of 16 premium commercial properties into the SM REIT framework in the coming weeks. These properties, spread across India’s top commercial hubs, are currently owned by retail investors through a fractional ownership model.

By shifting these assets into an SM REIT structure, hBits aims to enhance investor protection, increase liquidity, and ensure better regulatory oversight. Unlike traditional fractional ownership, SM REITs are governed by REIT regulations, which mandate disclosure norms, periodic reporting, listing of units on stock exchanges, and third-party valuation of assets—factors that are expected to boost investor confidence in this asset class.

Shiv Parekh, founder and CEO of hBits, emphasized the role of SM REITs in democratizing real estate investments. “India’s commercial real estate sector has shown steady growth, especially in Grade-A office spaces. With SEBI’s SM REIT regulations in place, there is now a well-defined path to provide retail investors access to income-generating, premium-grade commercial properties. Our focus is to build a high-quality, investor-friendly REIT that offers steady returns and capital appreciation,” he said in a statement.

The company also outlined its ambition to scale operations rapidly. It is actively scouting for new premium commercial assets across India’s top 10 cities, with the objective of achieving ₹2,000 crore in Assets Under Management (AUM) by March 2026. This aligns with its broader strategy to become a leading player in the structured retail real estate investment space.

In addition to regulatory progress, hBits recently raised ₹40 crore in its Series A funding round. The investment came from Capricon Realty Pvt Ltd, part of the Thackersey Group, and will help fuel expansion and portfolio diversification ahead of the SM REIT launch.

The introduction of SM REITs comes at a time when interest in alternative investment classes is growing. With traditional real estate investment often requiring large capital outlays and coming with liquidity challenges, fractional ownership—now backed by SM REIT regulations—offers a more accessible and structured entry point for individual investors. These trusts enable co-ownership of high-value properties, with units traded on stock exchanges, allowing for easier entry and exit.

As per SEBI’s framework, SM REITs must list their units on stock exchanges and follow similar rules as full-scale REITs, including minimum subscription requirements, leverage caps, asset valuation guidelines, and distribution norms. These measures aim to safeguard investor interests and promote long-term stability in the segment.

Notably, hBits is only the second company to receive approval under the new SM REIT framework, following Rudrabhishek Enterprises Ltd, which announced its upcoming "ImpactR SM REIT" offering earlier this year.

The success of these early entrants will likely shape the future of the SM REIT ecosystem in India. With its IPO plans underway and a portfolio of income-generating assets in place, hBits is poised to set a strong precedent for the sector. If successful, its SM REIT could emerge as a popular investment avenue for individuals seeking exposure to high-quality commercial real estate without the burden of full property ownership.