hBits receives SEBI license to launch SM REIT, plans to raise up to ₹500 crore via IPO

hBits, a platform for fractional investment in commercial real estate, has received a license from the Securities and Exchange Board of India (SEBI) to launch its Small & Medium Real Estate Investment Trust (SM REIT) public issue and plans to raise up to ₹500 crore.

The company plans to launch its maiden SM REIT IPO by June 2025. Over the next few weeks, hBits will also migrate its existing portfolio of premium commercial properties into the SM REIT structure, the company said in a statement.

This move marks the beginning of a new chapter for hBits as it seeks to democratize access to high-quality commercial real estate assets for retail investors. The SM REIT structure, governed by SEBI, is expected to significantly enhance transparency, compliance, and investor confidence in the emerging asset class of fractional commercial real estate ownership, it said.

hBits is actively looking to acquire new premium commercial properties in prime commercial locations including in top 10 cities, with a goal to achieve Assets Under Management (AUM) of ₹2,000 crore by March 2026, it said.

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hBits has a portfolio of 16 commercial assets. The company recently raised ₹40 crore in its Series A funding round from Capricon Realty Pvt Ltd, part of the Thackersey Group.

“India’s commercial real estate sector has witnessed strong and consistent growth, especially in office spaces. With SEBI’s SM REIT regulations now in place, the path is clear to build a transparent, structured, and investor-friendly platform for fractional ownership in commercial real estate. Our goal is to create access to high-yielding, premium-grade assets across India’s top commercial hubs and provide retail investors with consistent income and long-term wealth creation opportunities,” said Shiv Parekh, founder and CEO of hBits.

What are SM REITs?

In March 2024, SEBI notified the SM REIT regulations to bring FOPs (fractional ownership platforms) within the regulatory framework as a subclass within the REIT regulations for assets valued between ₹50 and 500 crores. Similar to REITs, SM REITs are fully regulated by SEBI with units of each of the schemes listed on the stock exchanges.

Fractional ownership permits individual investors to co-own commercial or residential assets as an alternative investment. Properties can be acquired through special purpose vehicles or through private limited companies.