SEBI vide its Circular dated 26th August, 2022 amended guidelines for preferential issue and institutional placement of units by a listed REIT. These guidelines were issued by SEBI vide its circular dated 27th November, 2019.
| Sr. No. | Part/Chapter/Section /Sub-section(s) | Old guidelines (SEBI Circular 27th November, 2019) | New guidelines (SEBI Circular dated 26th August, 2022) | Comment |
| 1. | Modification in Clause 3.5 of SEBI Circular dated 27th November, 2019 | 3.5 Post allotment, the InvIT shall make an application for listing of the units to the stock exchange(s) and the units shall be listed within seven working days from the date of allotment: Provided that where the InvIT fails to list the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the allotment, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the InvIT and the investment manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum. | “3.5. Post allotment, the InvIT shall make an application for listing of the units to the stock exchange(s) and the units shall be listed within two working days from the date of allotment: Provided that where the InvIT fails to list the units within the specified time, the monies received shall be refunded through verifiable means within four working days from the date of the allotment, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the InvIT, investment manager of the InvIT and its director or partner who is an officer in default shall, on and from the expiry of the fourth working day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum”. | Due to this amendment, number of days within which units shall be listed has been reduced from seven to two days. Further, for units which fails to list within specified time, the monies received shall be refunded within four days from the date of allotment which previously was twenty days. |
| 2. | Modification in Sub-paragraph (A) of paragraph 2 of Annexure-I of SEBI Circular dated 27th November, 2019 | A. Pricing of frequently traded units 2.1. Where the units of the InvIT are frequently traded, the price of units to be allotted pursuant to the preferential issue shall not be less than higher of the following: 2.1.1. the average of the weekly high and low of the volume weighted average price of the related units quoted on the relevant stock exchange during the twenty six weeks preceding the relevant date; or 2.1.2. the average of the weekly high and low of the volume weighted average prices of the related units quoted on the relevant stock exchange during the two weeks preceding the relevant date. 2.2. A preferential issue of units to institutional investors, not exceeding five in number, shall be made at a price not less than the average of the weekly high and low of the volume weighted average prices of the related units quoted on a recognized stock exchange during the two weeks preceding the relevant date. | “A. Pricing of frequently traded units 2.1 Where the units of the InvIT are frequently traded, the price of units to be allotted pursuant to the preferential issue shall not be less than higher of the following: 2.1.1. the 90 trading days’ volume weighted average price of the related units quoted on the recognised stock exchange preceding the relevant date; or 2.1.2. the 10 trading days’ volume weighted average prices of the related units quoted on a recognised stock exchange preceding the relevant date. 2.2. A preferential issue of units to “institutional investors” not exceeding five in number, shall be made at a price not less than the 10 trading days’ volume weighted average prices of the related units quoted on a recognised stock exchange preceding the relevant date. | Due to this amendment, the pricing formula for allotment of units under preferential issue will be the volume weighted average price of weekly highs and lows for 90 trading days or 10 trading days, whichever is higher. Previously, the pricing formula for preferential allotment is the volume weighted average price of last two weeks or last twenty six weeks, whichever is higher. |
| 3. | Modification in Clause 4.1 of Annexure-I and the explanation stands deleted of SEBI Circular dated 27th November, 2019 | 4.1. Preferential issue of units shall not be made to any person who has sold or transferred any units of the issuer during the six months preceding the relevant date. | “4.1 Preferential issue of units shall not be made to any person who has sold or transferred any units of the issuer during the 90 trading days preceding the relevant date. Further, where any person belonging to the sponsor(s) has sold/transferred their units of the issuer during the 90 days preceding the relevant date, all sponsors shall be ineligible for allotment of units on a preferential basis. | Due to this amendment, timelines has been extended to six months preceding the relevant date which for preferential issue of units for person who has sold or transferred any units which previously was of 90 days preceding the relevant date. |
- This circular shall be applicable to all Infrastructure Investment Trusts (“InvITs”), Parties to InvITs, Recognised Stock Exchanges, Depositories and Merchant Bankers.
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