Guidelines for determination of allotment and trading lot size for REITs and InvITs

Apr 24, 2019 | by Avantis RegTech Legal Research Team


The Securities Exchange Board of India (SEBI) on April 23, 2019, has issued guidelines for determination of bidding, allotment and trading lot size for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). Recently amendments have been made in SEBI (Infrastructure Investment Trusts) Regulations, 2014 vide Notification No. SEBI/LAD-NRO/GN/2019/10 dated April 22, 2019 and (Real Estate Investment Trusts) Regulations, 2014 vide Notification No. SEBI/LAD-NRO/GN/2019/09 dated April 22, 2019. The amendments reduced the minimum subscription requirement and defined the trading lot in terms of number of units. The limits for aggregate consolidated borrowings and deferred payments, net of cash and cash equivalents, have been increased to seventy percent of the value of the InvIT assets. 

The Guidelines are:

•For determining the allotment in an initial offer by a publicly offered InvITs or REITs, the value of each allotment shall not be less than Rs 1 lakh for InvITs and Rs 50,000 for REITs, where such lot shall consist of 100 units. The allotments to any investor shall be made in the multiples of a lot.

•For follow-on offer by a publicly offered InvITs or REITs, the minimum allotment shall be of such number of lots, whose value is not less than Rs 1 lakh for InvITs and Rs 50,000 for REITs, where each lot shall consist of such number of units as in its trading lot.

•The recognized stock exchanges will determine the number of units in the trading lot for such REITs or InvITs, within a period of 6 months from the date of this Circular.

InvITs whose aggregate consolidated borrowings and deferred payments above 49 percent have to disclose additional items:

i.Asset cover available

ii.Debt-equity ratio

iii.Debt service coverage ratio

iv.Interest service coverage ratio

v.Net worth

[Circular No. SEBI/HO/DDHS/DDHS/CIR/P/2019/59]

Click here to download the Circular.

 


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