The Securities and Exchange Board of India on 28th September 2022, issued a circular amending its Guidelines for preferential issue and institutional placement of units by a listed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITS).
Through this amendment, no allotment shall be made, either directly or indirectly, to any institutional investor who is a sponsor(s) or manager, or is a person related to, or related party or associate of, the sponsor(s) or the manager.
Provided that allotment of units can be made to the sponsor for un-subscribed portion in the institutional placement subject to following conditions
- at least ninety percent of the issue size has been subscribed
- objects of the issue is acquisition of assets from that sponsor
- units allotted to sponsor shall be locked in as per Clause 3 of Annexure I.
- unitholders approval shall be taken for unsubscribed portion being allotted to sponsor”
Further the InvITS/REITs shall satisfy the following condition under clause 2.2 for making a preferential issue of units or an institutional placement of units:
Units of the same class, which are proposed to be allotted have been 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 for convening the meeting to pass the resolution.
