SUBSCRIBE NEWSLETTER
  • Change Language
  • English
  • Hindi
  • Marathi
  • Gujarati
  • Punjabi
  • Tamil
  • Telugu
  • Bengali
  • CafeAlt Ajay Tyagi: SEBI set to release guidelines on rights issue for REITs

    Ajay Tyagi: SEBI set to release guidelines on rights issue for REITs

    The announcement comes after SEBI released guidelines on preferential issue and institutional placement of units by listed REIT last week.
    Team Cafemutual Dec 5, 2019

    SEBI Chairman Ajay Tyagi said that the market regulator is working on rights issue norms for Real Estate Investment Trusts (REITs). Rights issue means an issue of shares or units offered at a special price by a company to its existing shareholders in proportion to their holding of old shares. Tyagi was speaking at the AIBI Annual Summit held today in Mumbai.

    The announcement to come up with new rights issue norms comes after the SEBI released guidelines on preferential issue and institutional placement of units by a listed REIT.

    The circular defined “preferential issue” as an issue of units to select persons on a private placement basis, whereas “institutional placement” means a preferential issue of units by a listed REIT to institutional investors only.

    For a preferential issue of units and institutional placement of units, here are some of the key conditions that listed REITs need to follow:

    • To begin with, REITs need to take approval from existing investors
    • Units proposed to be allotted 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
    • REITs have to obtain in principle approval from the stock exchanges for listing the units that are proposed to be issued
    • The REIT cannot make any subsequent institutional placement until six months after the date of the earlier institutional placement

    Manner of issuance of units

    The units need to be allotted in the dematerialized form only and listed on the stock exchanges

    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 REIT 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 REIT 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 REIT needs to repay that money with 15% interest rate per annum

    REIT 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

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

    Click to clap
    Disclaimer: Cafemutual is an industry platform of mutual fund professionals. Our visitors are requested to maintain the decorum of the platform when expressing their thoughts and commenting on articles. Viewers are advised to refrain from making defamatory allegations against individuals. Those making abusive language or defamatory allegations will be blocked from accessing the web site.
    0 Comment
    Be the first to comment.
    Login or Sign up to post comments.
    More than 2,07,000 of your industry peers are staying on top of their game by receiving daily tips, ideas and articles on growth strategies. Join them and stay updated by subscribing to Cafemutual newsletters.

    Fill in the below details or write to newsdesk@cafemutual.com and subscribe to Cafemutual Newsletter now.
    Cafemutual is an independent media platform and focuses on providing knowledge and information for the benefit of finance professionals. We do not promote any particular brand or asset category.