SEBI On Public Issue Of REITs Norms
In 2014, Securities Exchange Board of India (SEBI) notified SEBI REITs Regulations towards regulating investments in REITs. However, investors are anticipating more positive measures to spring up.
In a step towards promoting the setting up of REITs, SEBI on Monday stated guidelines as per which Real Estate Investment Trusts (REITs) can raise funds through a public issue. This comprises allocation of units made to institutional investors.
It said that the public issue will not be made by the trusts that are included in the 'wilful defaulter' list or the ones that have been prohibited to access the securities markets.
Important norms as stated by SEBI:
- REIT's can allot around 60 per cent of the portion to the institutional investors.
- If REIT's use book building process to raise funds, then up to 75 per cent can be allocated to institutional investors and the share for other investors is 25 per cent.
- Investors have to apply for at least Rs 10 crore. The allocation would be made on an optional basis. The minimum investors are two for allocation made up to Rs 250 crore and for allocation more than Rs 250 crore, the minimum limit is at least five investors. Â
- An issue will be opened to the public after a minimum of five working days from the date on which the offered document was filed with SEBI. The period for which the issue will remain open varies from three working days to maximum 30 days.
"The manager on behalf of the REIT shall make prompt, true and fair disclosure of all developments taking place between the date of filing offer document with the board and the date of allotment of units which may have a material effect on the REIT, by issuing public notices," the regualtor has reportedly said.