Sebi revises REITs, InvITs disclosure norms for offer documents

Sebi on Wednesday revised the disclosure requirements for Real Estate Investment Trusts and Infrastructure Investment Trusts, revising norms related to financial information in offer documents and post-listing disclosures.

Under the new rules, REITs and InvITs issuing offer documents or follow-on offers must disclose audited financial statements for the last three financial years and a stub period, if applicable, Sebi said in two separate circulars.

If the latest audited financials are older than six months from the date of filing, additional stub period financials must be provided. In the case of follow-on offers where the entity has not existed for three years, disclosures must cover the period of existence and the stub period, the regulator said.

For initial offers, audited combined financial statements of the REIT and InvIT shall be disclosed in the offer document / placement memorandum.

Sebi also specified additional disclosures, which will be included as a part of the audited financial information and shall also be subjected to audit. These include project-wise operating cash flows, contingent liabilities and commitments as of the date of the latest financials.

The financial information will be audited by peer-reviewed auditors approved under the REIT and InvIT regulations.

These circulars will applicable with immediate effect except for the requirements specified under Chapter 4 which shall be applicable for disclosure of financial information for the period beginning on or after April 1, 2025, Sebi said.

On the continuous compliance front, REITs and InvITs are required to submit quarterly and year-to-date financial results within 45 days of quarter-end, except for the final quarter to the stock exchanges.

Further, the annual financial results must be submitted within 60 days of the financial year-end, and the final quarter results must reconcile the full-year audited figures with those reported up to the third quarter.

Additionally, disclosure of unit holding patterns has also been made more rigorous. REITs and InvITs must report their unit holding pattern one day prior to listing, quarterly within 21 days, and within 10 days of any capital restructuring leading to a change exceeding two per cent in the total outstanding units.

Sebi had formed a Working Group for review of compliance requirements for REITs and InvITs, constituted under the aegis of Hybrid Securities and Advisory Committee (HySAC).

The regulator issued revised guidelines on the basis of the report of the Working Group.