SEBI has issued a Circular amending its Guidelines for preferential issue and institutional placement of units by a listed Real Estate Investment Trusts (REITs). This Circular was issued on 28th September 2020.
The Guidelines were issued originally on 27th November 2019. However, SEBI has now decided that in view of the COVID19 pandemic it is necessary to provide some relaxations to these guidelines and has therefore issued this Circular amending them.
The key amendments are as follows:
REITs can now make institutional placements two weeks after the date of prior institutional investments. Prior to this amendment, the guidelines had stipulated for a gap of six months between two institutional placements.
Further, the amendment provides that the REIT can opt for a pricing method for any preferential issues made during the period beginning from 28th September 2020 to 31st December 2020. In this regard, SEBI has specified the pricing method to be followed.
The Circular further states that the units which are allotted on a preferential basis using the specified pricing method will be locked-in for three years. Furthermore, all allotments arising out of the approval of the same unit-holders will also follow the same pricing method.
SEBI has also clarified that units held by sponsors and already locked-in for three years on previous occasions in accordance with the REIT Regulations will be taken into account while computing the lock-in requirement. These units will not be put under a fresh lock-in once more if they are free of lock-in at the time of the preferential issue.
