The Securities and Exchange Board of India vide its notification dated 4th November 2020 has issued guidelines for a rights issue of units by unlisted infrastructure investment and in order to enable unlisted InvITs to raise further funds, it has been decided to provide a mechanism for raising of funds by unlisted InvITs through rights issue of unit.
As per the guidelines, no infrastructure investment trusts shall make a rights issue of units unless, a resolution of the board of directors of the investment manager approving the rights issue of units and determining the record date has been passed and Units of the same class, which are proposed to be allotted are already issued by the InvIT.
The investment manager, on behalf of the InvIT shall file a letter of offer with the Board at least 5 days prior to the opening of the issue and shall carry out the obligations relating to the issue.
The application form for the issue shall be prepared by the investment manager and the investment manager shall make arrangements for distribution of the application form along with a letter of offer to all unitholders as on the record date at least five days prior to the opening of the issue.
The rights issue shall open within three months from the record date and rights issue shall be kept open for at least three working days but not more than fifteen working days.
Further, the infrastructure investment trusts shall not make any further issue of units in any manner during the period between the date of filing the letter of offer with the Board and the allotment of the units offered through the letter of offer.
The InvIT shall file an allotment report with the Board providing details of the allottees and allotment made within 15 days of the issue closing date.
