Strata Withdraws SM REIT License as SEBI Issues Investor Alert—Legal Dispute Sparks Concerns

The Securities and Exchange Board of India (SEBI) has officially accepted the surrender of Strata’s Small and Medium Real Estate Investment Trust (SM REIT) registration, issuing an advisory to investors against dealing with the entity. This action comes in the wake of legal controversies involving Strata’s co-founder and sheds light on the increasing scrutiny facing India's new-age fractional ownership real estate platforms.

Strata Voluntarily Exits SM REIT Framework

Strata, a key player in India’s burgeoning fractional property investment market, had obtained SEBI approval to launch an SM REIT in January 2025. However, the company voluntarily gave up this license by May 14, 2025. SEBI's acceptance came after reviewing the legal proceedings linked to the company’s promoter and conducting discussions with the firm’s management and trustees.

Legal Dispute with Developer Triggers SEBI Action

According to reports, the regulatory spotlight was triggered by a legal battle between Strata and Chennai-based developer Avigna, centered around a warehousing project in Hosur. Allegations emerged that a Strata executive had impersonated a SEBI official in an attempt to obtain confidential information from Avigna. This incident prompted a police complaint and judicial proceedings. While Strata’s co-founder, Sudarshan Lodha, has denied any wrongdoing, he has secured anticipatory bail from the Madras High Court.

SEBI Issues Investor Warning