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SEBI has allowed existing Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) players to issue additional units of REITs and InVITs after listing through Follow-on Public Offer (FPO) route.
The new regulations aim to make fund-raising more efficient and transparent. Here are the key developments in regulations:
- REITs and InvITs seeking an FPO must apply for in-principle approval from all stock exchanges, where they are listed
- REITs and InvITs must file a draft FPO document with SEBI and stock exchanges through a merchant banker
- Units issued through an FPO must be in dematerialized form
- The minimum public unit holding must be at least 25% of the total outstanding units
- The process for unit allotment and listing will follow the same timeline as for IPOs
- During the period between the filing and listing of an FPO, REITs and InvITs cannot undertake additional fundraising through any other means except under an employee benefit scheme
- 15% of the units allotted to sponsors and sponsor groups in REITs should be locked-in for three years from the date of trading approval of additional units
- Such a lock-in limit will be 25% of the units allotted to sponsors and sponsor groups in InvITs
- The remaining units allotted to sponsors and sponsor groups of both REITs and InvITs will be locked-in for one year
