On 28-09-2022, the Securities and Exchange Board of India (‘SEBI’) has issued circulars modifying the guidelines for preferential issue and institutional placement of units by listed InvITs/ REITs which were issued vide Circular dated 27-11-2019.

Key Points:

  1. Bar for minimum listing period of 12 months required in case of issuance of units through “institutional placement” is removed.

  2. The unsubscribed portion of the units can be allotted to the sponsors fulfilling the following conditions:

    • 90% of the issue size has been subscribed;

    • The issue should be made for acquisition of assets from that sponsor;

    • Units allotted should be locked in for a period of 3 years from the date of trading approval granted for the units. (As per Clause 3 Annexure I of Circulars dated 27-11-2019);

    • Approval of unitholders has been taken before allotting the un-subscribed portion of the unit.

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