– The following are the proposals for amendment:
- Reduction in the minimum allotment and trading lot for publicly issued InvITs and REITs-
REITS INVITS Current regulatory framework · Minimum subscription in an initial offer and a follow- on offer from any investor shall be Rs. 2 lakhs.
· The prescribed trading lot for the purpose of trading of units of the REIT on the designated stock exchange, is Rs. 1 lakh.
· Minimum subscription in an initial offer and a follow- on offer from any investor shall be Rs. 10 lakhs.
· Trading lot for the purposes of trading of publicly listed units, on the designated stock exchange, shall be Rs. 5 lakhs.
Proposal The minimum application and trading lot for publicly issued InvITs and REITs is proposed to be revised as follows:
a. At the time of initial/follow-on issue, the minimum application and allotment lot shall be of 100 units and the value of one such lot shall be within the range of Rs. 15,000– Rs. 20,000.
b. Allotment shall be made in multiples of a lot.
c. After initial listing, a trading lot shall also be of 100 units.
- Increase in the leverage limit-
- Current regulatory framework: Regulation 20(2) of the InvIT Regulations provides that the aggregate consolidated borrowings and deferred payments of the InvIT net of cash and cash equivalents shall never exceed 49 % of the value of the InvIT assets. Regulation 22(4)(b) of the InvIT Regulations, any borrowing exceeding 25% of the value of the InvIT assets requires unit holders’ approval and mandatory credit rating.
- Proposal- It is proposed that the leverage limit for InvITs be increased from existing 49% to 70%.
- New regulatory structure for privately placed unlisted InvITs-
- Current regulatory framework- The InvIT Regulations provide for mandatory listing of units of InvITs, issued either through publicissue or on private placement basis.
- Proposal- The regulatory framework for privately placed listed InvITs, including registration requirements, structural obligations, operational requirements, corporate governance and investor protection measures, etc. shall be made applicable mutatis-mutandis for the proposed framework for privately placed unlisted InvIT.
Public comments are invited on the proposed framework given at Para 4, 5 and 6 above. The comments, may be sent by email or through post, latest by February 18, 2019. Read More
Detailed article can be read here.