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SEBI has issued guidelines for Real Estate Investment Trust (REITs) and Infrastructure Investment Trusts (InvITs) to arrive at the net distributable cash flow (NCDF), which is equivalent to dividend.
With this, the NCDF will now be computed at the level of REITs/InvITs and their holding companies or special purpose vehicles (SPVs). Further, REITs/InvITs and their holding companies/SPVs will have to distribute at least 90% of the total NCDF. Such a distribution has to be reviewed periodically.
Further, SEBI said that REITs/InvITs can retain 10% of the NCDF by taking together the retention done at SPV and trust level.
The new framework will be applicable from April 1, 2024.
