Sebi eases norms for REITs, InvITs to raise fund in institutional placement

Seeking to make fund raising easier, markets regulator Sebi on Monday provided relaxations to REITs and InvITs for preferential and institutional placement of their respective units.

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) can now raise equity capital through institutional placement route two weeks after a previous such exercise.

Earlier, the mandated time gap was six months between two institutional placements.

Also, changes have been made with respect to pricing of units by REITs and InvITs for preferential issues.

In two separate but similarly worded circulars, Sebi said that in view of the situation emerging out of the coronavirus pandemic, it has "granted certain relaxations for raising of equity capital" by listed REITs and InvITs.

Sebi said REITs and InvITs "shall not make any subsequent institutional placement until the expiry of two weeks from the date of the prior institutional placement made pursuant to one or more special resolutions".

Also, a provision has been put in place with regard to pricing of units for any preferential issue made between the date of the circular and December 31, 2020.

The units allotted on a preferential basis using the pricing method set out by the regulator shall be locked-in for a period of three years, as per the circulars.

All allotments arising out of the approval of the same unitholders need to follow the same pricing method.

For computation of the lock-in requirement, the units held by the sponsors and locked-in for three years in the past, in accordance with REIT and InvIT Regulations, shall be taken into account, Sebi noted.

The units locked-in pursuant to REIT and InvIT norms "shall not be put under fresh lock-in again, even though they are considered for computing the lock-in requirement, in case the said units are free of lock-in at the time of the preferential issue," it added.