Sebi comes out with norms for public issue of InvITs

Heralding new avenues for raising funds, markets regulator Sebi today came out with fresh guidelines for public issuance of Infrastructure Investment Trusts (InvITs).
The new norms for the public issuance of InvITs pertain to appointment of merchant bankers, disclosures in the offer documents, filing of draft papers and keeping them in the public domain for at least 21 days.
In an issue made through the book building process or otherwise, the allocation in the public issue should be maximum 75 per cent to qualified institutional buyers (QIBs) and at least 25 per cent to other investors, Sebi said.
Investment managers can allocate up to 60 per cent of the portion available for allocation to QIBs to anchor investors, subject to certain conditions.

An anchor investor can make an application of a value of at least Rs 10 crore in the public issue.
"Allocation to anchor investors shall be on a discretionary basis and subject to the minimum of two investors for allocation up to Rs 250 crore and minimum of five investors for allocation of more than Rs 250 crore," Securities and Exchange Board of India (Sebi) said in a circular.

The InvIT will have to deposit, before the opening of subscription, and keep deposited with the stock exchange, an amount calculated at the rate of 0.5 per cent of the amount of units offered for subscription to the public.

The issue would need to be opened after atleast three working days from the date of filing the offer document with Sebi.
Besides, the issue would need to be kept open for at least three working days but not more than 30 days. The investment manager may issue advertisements for issue opening and closing advertisements, Sebi said.
The regulator also said that any public communication including advertisement, publicity material and research reports concerned with the issue should not contain any matter extraneous to the contents of the offer document.
Sebi also said that no InvIT can make a public issue of units if it or any of its sponsors, investment manager or trustee is debarred from accessing the capital market by Sebi.

The restriction will also apply for promoter, director or person in control of any other company or a sponsor, investment manager or trustee of any other InvIT, or an InvIT which is debarred from market by Sebi, as also in the case of wilful defaulters identified by the RBI.
Besides, public issue can not be launched if the InvIT is in default of payment of distributions to the unit holders in accordance with the Sebi norms for a period of more than six months.
Earlier in December, the markets regulator had issued draft norms in this regard.