To develop the market for emerging investment instruments, the Securities and Exchange Board of India (SEBI) is looking to bring in norms for followon offers by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs), reported Press Trust of India.
REITs and InvITs were introduced in India to provide investors with an opportunity to gain exposure to real estate and infrastructure projects respectively.
“Taking cognisance of the potential of REITs and InvITs in driving the future of Indian infrastructure, SEBI would endeavour to further develop the market for REITs and InvITs in the coming years through policy measures including considering bringing in norms for followon offers by REITs and InvITs,” SEBI said in its annual report for 2022-23.
To streamline the process of public issues of REITs and InvITs, the time taken for allotment and listing after the closure of the issue was reduced from 12 to six working days. Similarly, for privately placed InvITs, the time taken was reduced from 30 to six working days. These measures will help enhance liquidity in the market and bring about parity with equity instruments.
The OFS mechanism has also been made available to unitholders or sellers of listed REITs and InvITs to offer their holdings through stock exchange mechanisms.
“REITs and InvITs are other innovative mechanisms to finance real estate and infrastructure which in turn can have a multiplier impact on India's economic growth,” SEBI said.
Last week, SEBI notified rules introducing special rights to unitholders of REITs who can now nominate representatives on the boards. Also, the regulator introduced the concept of a self-sponsored REIT. REITs and InvITs have continued to witness interest from the market with three new InvIT registrations and one new REIT registration during 2022-23.