Sebi amends guidelines on preferential allotment by listed InvITs

Markets regulator Sebi has tweaked its framework pertaining to allotment of units by emerging investment vehicle InvIT on a preferential basis. The preferential issue of units would not be made to any person who has sold or transferred any units of the issuer during the six months preceding the relevant date, the regulator said in a circular.

Explaining further, Sebi said, ”where any person belonging to sponsor (s) has sold/ transferred their units of the issuer during the six months preceding the relevant date, the sponsor(s) shall be ineligible for allotment of units on preferential basis”. In November 2019, the regulator had come out with guidelines for preferential issue as well as institutional placement of units by a listed real estate investment trust (REIT) and infrastructure investment trust (InvIT).

Securities and Exchange Board of India (Sebi) had first notified REITs and InvIT Regulations in 2014, allowing setting up and listing of such trusts which are popular in some advanced markets. However, to date, only a few InvITs and REITs have listed their units in India despite various relaxations given by the markets regulator.