In its recent board meeting, SEBI has relaxed criteria for companies to issue units of infrastructure investment trusts (InvITs) and real estate investment trusts (REITs).
The market regulator has asked companies to issue units of InvITs and REITs if they have combined experience of 30 years. Simply put, a company can float units of REITs and InvITs if all key employees like CEO, CIOs, fund managers and sales head have 30 years of combined experience in infrastructure sector from investment manager.
This is in addition to current regulation that allows companies with 5 years of experience in infrastructure sector from investment manager to issue units of InvITs and REITs.
The SEBI minutes of meeting said, “As an alternative to the requirement of 5 years’ experience in infrastructure sector for investment manager of an InvIT, the combined relevant experience of not less than 30 years of the directors/partners/employees of the investment manager shall also be considered.”
Industry experts believe that the move will help the National Highway Authority of India (NHAI) to float its InvIT issue. “The move will help NHAI speed up the process to launch an InvIT since they do not meet the existing criteria,” said a fund manager of an AMC requesting anonymity. NHAI is planning to raise over Rs.20, 000 crore through an InvIT.