Sebi proposes valuation norms for InvITs

Sebi wants mandatory disclosure in valuation report including adequate info on valuation and other aspects of underlying assets

The Securities and Exchange Board of India (Sebi) has issued a consultation paper on financial disclosures and valuation of the units of the newly introduced Infrastructure Investment Trusts (InvITs).

Sebi has proposed mandatory disclosure in the valuation report including adequate information about the valuation and other aspects of the underlying assets of InvITs. Also, historical valuations of assets of the past three financial years should be disclosed. Information on the assumed factors while calculating the valuation such as discounting rate, tenure etc should also be given.

Specific InvIT assets must have the list of one-time sanctions obtained or pending; list of clearances; statement of assets; and estimated time of completion of projects.
 

These apart, it has to disclose the revenue pendencies and compounding charges, if any.

The regulator has also proposed detailed financial statements “to be prepared in accordance with the Indian Accounting Standards, converged with the International Financial Reporting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015”.

Sebi in its consultation paper also defined the categories of ‘registered valuer’. This could be a chartered accountant, company secretary or cost accountant who is in whole-time practice or a merchant banker registered with Sebi. The market regulator will accept feedback till July 31.