SEBI proposes fresh norms for public issue of REITs
Q. Securities and Exchange Board of India proposed fresh norms for public issues of REITs. What are REITs?- Published on 04 Jan 16a. Real Estate Indian Trust
b. Real Estate Investment Trust
c. Real Estate Investing Trust
d. Realty Exchange Investment Trust
ANSWER: Real Estate Investment Trust
For providing new avenues for raising funds, capital market regulatory body SEBI on 31st December 2015 proposed fresh norms for public issue of Real Estate Investment Trusts. This includes a cap of 75% allocation to institutional buyers. Proposed norms for the public issuance of REITs pertain to appointment of merchant bankers, disclosures within the offer documents and filing of draft papers, keeping them in public domain for a minimum of 21 days. For issue made via book building process or otherwise, allocation in public issue should equal maximum 75% to Qualified Institutional Buyers and 25% to other investors, according to SEBI. Investment managers can allocate close to 60% of the portion available for allocation for QIBs to anchor investors subject to specific conditions. Anchor investors need to create applications for INR 10 crore minimum in public issue and allocation to investors should be on discretionary basis subject to minimum of two investors for maximum allocation up to INR 250 crore and 5 other such investors for over INR 250 crore.
