Market regulator Securities and Exchange Board of India (Sebi) has reduced the time taken for the listing of Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT), PTI reported.
The time taken for the listing of such emerging investment vehicles to six working days from the present 12 days, it added.
The new rule will apply to a public issue of units of REIT and InvIT, which opens on or after June 1, Sebi said. The move is aimed at making the existing process of issuance of such emerging investment vehicles simpler and more cost-effective, added PTI.
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A real estate investment trust (REIT) is an investment trust that owns, operates, and finances real estate with the main aim of generating income. It manages a portfolio of real estate assets that are high value and generate steep rent and leases.
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"As a part of the continuing endeavor to streamline the process of public issue of units of REIT and InvITs. It has been decided to reduce the time taken for allotment and listing after the closure of an issue to six working days as against the present requirement of within 12 working days," Sebi said in its circular.
In the report, PTI stated that the regulator has asked Self Certified Syndicate Banks (SCSBs), stock exchanges, depositories, and intermediaries to coordinate to ensure completion of listing (through the public issue) and commencement of trading of units of REIT and InvIT within six working days from the date of closure of the issue.
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Infrastructure Investment Trust (InvIT) is a collective investment instrument, especially pertaining to infrastructure assets. Like mutual funds, it pools together funds from long-term investors. Basically, instead of stocks, this pool of funds is used to acquire income-generating infrastructure assets from developers. It has a portfolio of operating infrastructure assets with a regular and stable stream of income. This income is given to unitholders as returns.
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REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in global markets.
While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise a portfolio of infrastructure assets, such as highways and power transmission assets.
As of March 2021, a total of 15 InvITs and four REITs were registered. Of these, six InvITs and three REITs were listed on the stock exchanges.
