Sebi issues detailed rules for depositary receipts on REIT, InvIT units

India's markets regulator on Monday issued a depositary receipts framework to let foreign ​investors buy into real estate investment ​trusts (REITs) and infrastructure investment trusts (InvITs) through select overseas ‌exchanges. The framework, proposed in August to attract more foreign capital to these sectors, was approved by the Securities and Exchange Board of India in September.

Depositary receipts are foreign-currency instruments issued by a foreign institution against securities held with a domestic custodian, allowing them to be traded in overseas ‌markets.

Sebi said REITs and InvITs proposing to list in India and simultaneously issue depositary receipts must seek approval from both the Indian exchange as well as the international exchange involved.

 

Any fresh issue of depositary receipts will require approval from at ​least 75% of unitholders.

Units issued for depositary receipts cannot be ‌priced lower than the price offered to Indian investors for a similar offering, the ​framework ‌adds.

Any fresh issue of depositary receipts on units of ‌a privately placed InvIT can be subscribed to only by foreign institutional investors and corporate bodies, ‌as ​per the framework ​for InvITs.

REITs and InvITs listed in India already accept foreign investment, subject to government ‌and central ​bank rules.