Sebi OKs fractional ownership framework for realty assets
Securities and Exchange Board of India on Saturday approved a proposal to introduce a framework for fractional ownership of real estate assets. The regulator, however, deferred its plan to make changes to delisting rules.
Sebi had proposed to allow companies to delist by coming out with a fixed price for the repurchase of shares, instead of the existing reverse book-building mechanism where they decide on the price based on the sell orders submitted by shareholders.
«It (delisting proposal) was discussed in the board meeting.
Our commitment to using data for policy making is such a strong commitment that the board directed us that since the number of delisting applications received over the last five years is small… the data set is very limited to draw a very significant conclusion,» Sebi chairperson Madhabi Puri Buch said after the board meeting. «The board guided us to go back and do further examination of certain data and do further consultation with stakeholders so that we have a better sense.
That is the reason that it was not done this time.»
The Sebi board approved setting up of small and medium real estate investment trusts (REITs), with an asset value of at least Rs 50 crore as compared to Rs 500 crore for existing REITs.
Sebi said small and medium REITs would have the ability to create separate schemes for owning real estate assets through special purpose vehicles constituted as companies. It said the existing structures could migrate, provided they meet certain criteria such as net worth, minimum unit holding requirement, minimum subscription, distribution and valuation rules.
The avenue would facilitate investment in primarily pre-leased real estate which earn the investors a rental yield, as well as
