SEBI Amends Guidelines for Preferential Issue and Institutional Placement of Units by listed REIT/InvIT

On 28 September 2022, the Securities and Exchange Board of India (SEBI) issued guidelines for modifying the provisions pertaining to preferential issue and institutional placement of units by listed InvITs/ REITs which were previously notified vide Circular dated 27 November, 2019.

Key Takeaways:

The amendment to Clause 2.2 provides that units of the same class, proposed to be allotted shall now be required to be listed for a period of 6 months.

As per the amended Clause 4.2, the unsubscribed portion of the units can be made to the sponsor in the institutional placement subject to the following conditions:

  1. Atleast 90% of the issue size has been subscribed.
  2. The object of the issue should be acquisition of assets from that sponsor.
  3. The allotted units should be locked in for a period of three years from the date of trading approval granted for the units. (As per Clause 3 Annexure I of Circulars dated 27-11-2019).
  4. Approval of unitholders should be taken before the allotting the unsubscribed portion of the units to sponsors.