The Securities and Exchange Board of India in its Notification dated 27th November 2019, has issued guidelines for preferential issue of units and institutional placement of units by a listed Real Estate Investment Trusts (REIT).
The Regulator has specified manner of issuance of units under preferential issue as well as institutional placement by listed real estate investment trust (REIT).
Key Highlights from the guidelines:
Conditions for issuance:- A listed REIT may make a preferential issue of units or an institutional placement of units under these guidelines, if similar units have been listed for a minimum of 6 months.
The REIT has obtained approval from existing unit holders and the stock exchanges for listing of units proposed to be issued under these guidelines
The REIT is in compliance with all the conditions for continuous listing and disclosure obligations.
The regulator prescribed that none of the respective promoters or partners or directors of the sponsor or manager or trustee of the REIT should be a fugitive economic offender.
The REIT shall not make any subsequent institutional placement until the expiry of six months from the date of the prior institutional placement.
Manner of issuance of units:- With regard to manner of issuance of unit, the units shall be allotted in the dematerialized form only and shall be listed on the stock exchange where the units of the REIT are listed. Any offer or allotment through private placement shall not be made to more than 200 investors in a financial year.
The issue of units that is proposed to be made for consideration other than cash, the regulator said that full consideration for the units issued shall be paid by the allottees prior to the allotment of the units, through banking channels and shall be kept in separate account.
The REIT shall make an application for listing of the units to the stock exchanges and the units shall be listed within seven working days from the date of allotment.
The REIT shall file an allotment report with SEBI within seven days of allotment of the units, providing details of the allottees and allotment made.
Click here to read the Notification
