Last week, SEBI has come up with guidelines on preferential issue and institutional placement of units by a listed Infrastructure Investment Fund (InvIT). Here “institutional placement” means a preferential issue of units by a listed InvIT only to institutional investors.
For a preferential issue of units and institutional placement of units, here are some of the key conditions that listed InvITs need to fulfil:
- InvITs need to take approval from existing investors
- Units of InvITs need to be listed on a stock exchange for a period of at least six months. In case of issuance of units through institutional placement, the minimum listing period is 12 months
- InvITs have to obtain in principle approval from the stock exchanges for listing the units proposed to be issued under these guidelines
- The InvIT cannot make any subsequent institutional placement until the expiry of six months from the date of the earlier institutional placement
Manner of issuance of units
- Any offer or allotment through private placement has to be made to not more than 200 investors (excluding institutional investors) in a financial year
- Post allotment, the InvIT needs to make an application for listing of the units to the stock exchanges and the units have to be listed within seven working days from the date of allotment
- If the InvIT fails to list the units within the specified time, it has to refund the money collected within 20 days from the date of allotment. Post the expiry of the 20th day, the InvIT needs to repay that money with 15% interest rate per annum.
- InvIT has to file an allotment report with SEBI within seven days of allotment of the units. It has to provide details of the allotment made.