The Securities and Exchange Board of India (SEBI) on Friday eased the framework for undertaking fast-track follow-on offers by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) for efficient fundraising.
In order to promote ease of doing business and based on the recommendations of the regulator’s hybrid securities advisory committee (HySAC), it has prescribed a three-year lock-in period for 15 per cent of the preferential issue of units of REITs and InvITs allotted to sponsors.
However, this is subject to the condition that the project manager of the REIT/InvIT is the sponsor and shall continue to act in such capacity for a period of minimum three years from the date of trading approval granted for the units, SEBI said in a circular.
Inter-se transfer
Further, SEBI has permitted inter-se transfer of locked-in units among sponsor and sponsor groups as long as the lock-in on such units continues for the remaining period with the transferee. The transferee will not be eligible to transfer such units till the expiry of the lock-in period originally applicable to such units.
The regulator has also prescribed guidelines for follow-on offers regarding the listing of offers, allotment, restrictions on units, and documentation with exchanges. .
REITs and InvITs making a follow-on offer will be required to write an application to all stock exchanges on which their units are listed, and seek in-principle approval for listing their units on such exchanges. The manager and the merchant bankers would be responsible for obtaining the listing and trading approvals from exchanges.
The follow-on offer document will be filed with the regulator and stock exchanges after incorporating SEBI’s observations. The merchant banker would, along with the filing of the draft follow-on offer document, need to furnish a due-diligence certificate to SEBI.