Sebi issues norms for InvITs listing

Up to 75% institutional investors can come with public issue, while remaining 25% will be for other investors

Capital market regulator Securities and Exchange Board of India (Sebi) on Wednesday issued listing guidelines for infrastructure investment trusts (InvITs).

Like real estate investment trusts (Reits), InvITs are instrument through which investors can take exposure to income-generating infrastructure assets.

According to Sebi guidelines, public issue of InvITs will require institutional investors participation of 75 per cent, while the remaining 25 per cent can be from other investors. Besides, just like an initial public offering (IPO), InvIT may allocate up to 60 per cent of the portion available for allocation to Institutional Investors to anchor investors.

For opening of subscription, the InvIT should keep a deposit worth 0.5 per cent of the amount of units offered to the public or Rs 5 crore, whichever is lower with the stock exchange, said Sebi in its guidelines. InvITs listing are expected to encourage higher foreign investment in the Indian infrastructure sector, reduce the burden on the banking system, and allow developers to unlock tied-up capital.

A public issue shall be kept open for at least three working days but not more than thirty days. However, in case the price band in a public issue made through the book building process is revised, the bidding issue period will be extended for a minimum period of one working day. InvIT may issue advertisements for issue opening and issue closing.

Recently, IRB Infrastructure Developers and GMR Infrastructure sought market regulator's approval to launch India’s first InvITs. Sebi allowed InvIT in the year 2014.

Sebi guidelines also proposed to allow an InvIT to invest in special purpose vehicles (SPVs) that act as holding companies for other SPVs. The holding company, in turn, has to hold a controlling interest and at least 50 per cent in the underlying SPVs.