Fast-track follow-on offers for REITs, InvITs

Securities and Exchange Board of India (Sebi) on Thursday proposed a framework for undertaking fast-track follow-on offerings by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) to make fund raising more efficient. It has also suggested a three-year lock-in period for 15% of the preferential issue of units of REITs and InvITs allotted to sponsors.
Further, the remaining units allotted to sponsors would be locked-in for a one year period from the date of trading approval granted for the units.

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On follow-on offers, Sebi said a REIT or InvIT would have to make an application to all stock exchanges on which its units are listed and seek an in-principle approval for listing of its units on such stock exchanges. It would also have to choose one of them as the designated stock exchange.

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The minimum public unitholding would have to be at least 25 % of the total outstanding units of the REIT/ InvIT on post issue basis.

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