Leverage limits require credit rating and unit holder approval for additional borrowings beyond the specified threshold and cure on breach.

SM REIT schemes may raise capital only by issuing units, with foreign investment subject to RBI and Government guidelines. Leverage is permitted only if disclosed in the initial offer; leveraged schemes and their SPVs may borrow or issue debt securities under the non-convertible securities regulations. SPVs must receive equity from the scheme and may borrow from the scheme. Scheme-level borrowings and deferred payments net of cash and cash equivalents are capped at a prescribed proportion of scheme assets; exceeding an intermediate threshold requires a Board-registered issuer credit rating and unit holder approval. Refundable tenant deposits are excluded from borrowings and invested in liquid assets; cash equivalents are excluded from asset value. Breaches from asset price declines must be remedied within six months with trustee notification.

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