SEBI Frames Charter For Fast-Track Follow-On Offer By REITs And InvITs
SEBI Frames Charter For Fast-Track Follow-On Offer By REITs And InvITs
The public can send in their comments by 13 March
The Securities and Exchange Board of India (SEBI) has proposed to fast-track follow-on offers by Real Estate Investment Trusts (REITs) and infrastructure investment trusts (InvITs) to make fundraising more efficient.
The capital market regulator also initiated a three-year lock-in provision for preferential issues of 15 percent units of REIT and InVIT allotted to sponsors and sponsor groups from the trading approval date. The remaining units would be locked in for one year.
On the follow-on offer, it stated that the FPO was one of the mechanisms for raising funds after the issue of units after the initial public offer (IPO).
SEBI clarified that while making an FPO, REIT and InvIT must ensure to file an application to all stock exchanges on which their units are listed. They must seek in-principle approval for listing their units and choosing one stock exchange.
SEBI’s consultation paper said that the manager and the merchant bankers should be responsible for obtaining in-principle approval and final listing and trading approvals from the stock exchanges.
The minimum public unitholding should be at least 25 percent of the total outstanding units of REIT on a post-issue basis.
It added, "A REIT/InvIT shall not undertake any further issue of units in any manner whether by way of public, rights, or preferential issue, institutional placement or otherwise, except pursuant to a unit-based employee benefit scheme, if any, during the period between the date of filing of the draft follow-on offer document and listing of the units or refund of application money.”
REIT/InvIT should file the draft follow-on offer document through the merchant banker with the Board for its observations.
After incorporating the observations, the document would be filed with SEBI and recognized stock exchanges. The merchant banker should also furnish a due diligence certificate with the regulator.
Recently, SEBI proposed REITs and InvITs disclose financial information in their offer documents in line with the public issue and listing norms.
