Sebi notifies public issue of REITs norms

Markets regulator Sebi on Tuesday put in place detailed guidelines for public issuance of Real Estate Investment Trusts (REITs) including allocation of units to institutional investors. The trusts, its promoters and directors, which have been barred from accessing the securities markets, or those who are in the ‘wilful defaulter’ list, would not make any public issue, Securities and Exchange Board of India (Sebi) said in a circular.

In an issue made through the book building process, up to 75 per cent would be allocated to institutional investors and 25 per cent to other investors.

To facilitate growth of REITs, Sebi last month notified revised and easier regulations for raising capital through this instrument.

Sebi had notified the REIT Regulations in 2014, allowing setting up of and listing of such trusts, which are very popular in some advanced markets. However, not a single trust has been set up in India as of now as investors await further measures, including tax breaks, to make these instruments more attractive.

Spelling out norms for REIT’s public issue, Sebi said that such trusts can allocate up to 60 per cent of the portion available for allocation to institutional investors to anchor investors.