SEBI proposes changes to REIT, InvIT norms for ease of doing business
This story was originally published at 16:36 IST on 20 February 2025
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MUMBAI – The Securities and Exchange Board of India Thursday proposed amendments to the guidelines on lock-in provisions for preferential issue of units and follow-on offer for real estate investment trusts and infrastructure investment trusts to promote ease of doing business.
In a consultation paper, SEBI proposed that 15% of the units allotted to a sponsor be locked in for a period of three years from the date of trading approval granted for the units, with the condition that the project manager is same as the sponsor. When this condition is not met, 25% of the units allotted to a sponsor should be locked in for a period of three years. It further said that the remaining units can be locked in for one year.
On follow-on offers, industry associations suggested a framework for undertaking fast-track follow-on offers with an aim to make fundraising more efficient. "A "follow–on offer" means offer of units of a listed REIT to the public for subscription and includes an offer for sale of REIT units by an existing unit holder to the public," SEBI said in the consultation paper.
SEBI has proposed that infrastructure investment trusts that wish to issue units should apply to stock exchanges to seek in-principle approval for listing of its units on such stock exchanges. The regulator has mandated that the units be issued in dematerialised form. "The minimum public unitholding shall be at least 25% of the total outstanding units of the InvIT on post issue basis," SEBI said in the consultation paper. If the the InvIT fails to allot or list the units in a follow-on offer, the regulator has proposed payment of interest.
The proposed amendments will come into effect on an immediate basis, SEBI said. The stakeholders can submit their comments and suggestions till Mar. 13. End
Reported by Christina Titus
Edited by Ashish Shirke
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