SEBI unveils norms for public issue of infrastructure investment trusts

NEW DELHI: The capital market regulator Securities and Exchange Board of India (Sebi) on Wednesday issued a listing guideline for Infrastructure Investment Trusts (InvITs),  which manage income generating infrastructure assets and offering a liquid method of investing in infrastructure projects.

According to the Sebi guidelines, up to 75 per cent institutional investors can come with the public issue, while remaining 25 per cent will be for other investors. Besides, InvITs may allocate up to 60 per cent of the portion available for allocation to institutional investors to anchor investors.

For opening of subscription, the InvIT should keep a deposit worth 0.5 per cent of the amount of units offered to the public or Rs 5 crore, whichever is lower with the stock exchange, said Sebi in its guidelines.

The new norms for the public issuance of InvITs pertain to appointment of merchant bankers, disclosures in the offer documents, filing of draft papers and keeping them in the public domain for at least 21 days.

Anchor investors, such as mutual funds, insurance firms and pension funds can come as a strategic investor in the public issue of an InvIT if it applies for buying units worth at least Rs 10 crore.

In the public issue, Sebi said, the allocation to anchor investors will be done on a discretionary basis and subject to the minimum of two investors for allocation up to Rs 250 crore or a minimum of five investors for a total allocation of more than Rs 250 crore.

Prior to the opening of subscription, the InvIT will be required to keep a security deposit worth 0.5 per cent of the amount of units offered to the public or Rs 5 crore, whichever is lower with the stock exchange, Sebi said.

The issue would need to be opened after at least three working days from the date of filing the offer document with Sebi. Besides, the issue would need to be kept open for at least three working days but not more than 30 days. The investment manager may issue advertisements for issue opening and closing advertisements.

The regulator also said that any public communication including advertisement, publicity material and research reports concerned with the issue should not contain any matter extraneous to the contents of the offer document.

Though Sebi allowed launch of InvITs in 2014, no firm has launched any InvIT in the country yet. In August 2015, Sebi had proposed to ease norms for InvITs and reduced the minimum commitment amount required by sponsors in InvITs from 25 percent to 10 per cent.

Sebi also said that no InvIT can make a public issue of units if it or any of its sponsors, investment manager or trustee is debarred from accessing the capital market by Sebi. Besides, public issue can not be launched if the InvIT is in default of payment of distributions to the unit holders in accordance with the Sebi norms for a period of more than six months.

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