SEBI has reduced the minimum ticket size today for investments in Real Estate Investment Trusts (REIT) and Infrastructure Investment Trusts (InvIT) to Rs.50,000 and Rs.1 lakh, respectively.
The SEBI circular issued today also permits InvITs to increase their borrowings to 70%. Here are the two major guidelines:
Reduced minimum ticket size
Currently, investors have to invest a minimum of Rs.10 lakh in the InvIT during the offer period and the minimum lot size for trading is Rs.5 lakh.
In case of REITs, the minimum subscription amount is Rs.2 lakh while transaction can take place in lots of Rs.1 lakh.
As per revised regulations, investors can invest in these instruments in lots of 100 units each during the initial offer period. Each lot will be of Rs.1 lakh (InvITs) and Rs.50,000 (REITs).
For a follow-on offer by a publicly offered InvITs/REITs (existing instruments), they will have to maintain the minimum allotment value of Rs.1 lakh for InvITs and Rs.50,000 for REITs. The allotment will be in multiples of a lot.
However, the number of units in a lot will be determined by registered stock exchanges within the next six months based on the trading price.
Increased leverage up to 70% permitted for InvITs
InvITs opting to increase their aggregate consolidated borrowings and deferred payments above 49% will also have to disclose asset cover available, debt-equity ratio, debt service coverage ratio, interest service coverage ratio and net worth in addition to its existing disclosures.
