Sebi reduces minimum subscription size for REITs, InvITs
25 Apr 2019
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Securities and Exchange Board of India (Sebi) has lowered the minimum subscription size for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) and also defined trading lots for REITs and InvITs.
For determining the allotment in an initial offer, by a publicly offered InvITs/REITs, Sebi said, the value of each allotment lot shall not be less than Rs1 lakh for InvITs and Rs50,000 for REITs, where such lot shall consist of 100 units.
Allotment to any investor shall be made in the multiples of a lot.
For follow-on offer by publicly offered InvITs/REITs, the minimum allotment shall be of such number of lots, whose value is not less than Rs1 lakh for InvITs and Rs50,000 for REITs, where each lot shall consist of such number of units as in its trading lot.
Allotment to any investor shall be made in the multiples of a lot.
For initial listing, a trading lot should be of 100 units and during follow-on offer each lot shall consist of such number of units in its trading lot as it had at the time of initial offer.
Currently, in the case of an REIT issue, the minimum subscription from any investor in an initial offer and follow-on public offer is not less than Rs 2 lakh, while the same is Rs 10 lakh in case of InvIT.
Stock exchange(s) shall, in consultation with the publicly offered InvITs/REITs, whose units are listed, determine the number of units in the trading lot for such REITs/InvITs, within a period of 6 months.
InvITs, which in terms of Regulation 20(3)(b) of the InvIT Regulations, have their aggregate consolidated borrowings and deferred payments above 49 per cent, shall, in addition to financial disclosures as specified vide Sebi circular of 29 November 2016, disclose additional items such as asset cover available; debt-equity ratio; debt service coverage ratio; interest service coverage ratio; and net worth.
The said amendments have, inter-alia, for publicly offered InvITs and REITs, reduced the minimum subscription requirement and has defined the trading lot in terms of number of units. Further, limits for aggregate consolidated borrowings and deferred payments, net of cash and cash equivalents, have been increased to seventy per cent of the value of the InvIT assets.
