Sebi suggests new financial disclosures rules for Reits, InvITs' offer docs

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Sebi on Friday floated a draft circular proposing REITs, InvITs to disclose financial information in their offer documents inline with public issue and listing norms.

The proposed revisions focus on financial disclosures in offer documents and continuous compliance requirements post-listing.

These changes are based on the recommendations from the Working Group on Ease of Doing Business for REITs and InvITs, inputs from the Indian REITs Association and Bharat InvITs Association, and internal deliberations, Sebi said.

Additionally, the regulator proposed that Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) will be required to disclose combined financial statements for initial public offerings, irrespective of their operational tenure.

Further, follow-on offers will need to present audited consolidated financial statements along with links to individual audited reports on their websites, it added.

To enhance investor protection, the regulator intends to remove the option of disclosing condensed financial statements in the offer document and continuous basis post listing, aligning REITs and InvITs with Sebi's ICDR (Issue of Capital and Disclosure Requirements) rules and LODR (Listing Obligations and Disclosure Requirements) norms.

Condensed financial statements refers to a summary of a company's financial performance and is presented in less detail than complete financial statements.

It has also proposed mandating quarterly submission of statements on deviations in the use of proceeds of issue from debt security, a reduction from the current half-yearly requirement, the regulator said.

The draft circular also mandates the disclosure of the net borrowings ratio in financial results and certain financial ratios for REIT/InvIT with any outstanding borrowings.

The Securities and Exchange Board of India (Sebi) has sought public comments on the disclosure of financial information in offer documents, and continuous disclosures and compliances by REITs and InvITs by March 7 through the online web-based form.