SEBI Lays guidelines for preferential issue of units and institutional placement of units by listed infrastructure investment trusts

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The Securities and Exchange Board of India (SEBI) on November 27, 2019, issued guidelines for preferential issue of units and institutional placement of units by a listed Infrastructure Investment Trust. (InvIT)

Key Highlights from the guidelines

The Institutional Placement means a preferential issue of units by a listed InvIT only to Institutional Investors, as defined under InvIT Regulations.

Conditions for issue: A listed InvIT may make a preferential issue of units or institutional placement of units under these guidelines subject to following conditions:-

A resolution of the existing unitholders approving the issue of units shall be passed and the units should be listed on a stock exchange for a period of at least six months prior to the date of issuance of notice to its unit holders. 

The InvIT shall be compliance with all the conditions for continuous listing and disclosure obligations and None of the respective promoter or partner should be a fugitive economic offender.

Further The InvIT shall not make any subsequent institutional placement until the expiry of six months from the date of the prior institutional placement.

The InvIT shall obtain in principle approval of the stock exchange(s).

Manner of issuance of units: Every issuance of the units under this guidelines shall be done in the following manner

The units shall be allotted only in dematerialized form and shall be listed on the stock exchange(s) where the units of the InvIT are listed and any offer or allotment through private placement shall not be made to more than 200 investors in a financial year.

The prospective allottees prior to allotment shall pay the full consideration for the units and the minimum allotment and trading lot for units issued shall be equivalent to the minimum allotment and trading lot as applicable to the units of the same class.

Post allotment the InvIT shall make an application to the stock exchanges for listing of the units and the units shall be listed within 7 working days from the date of allotment. Upon failing to list, monies received shall be refunded through verifiable means within twenty days after which interest of 15% per annum will be levied.

Click here to read the Notification.

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