The Securities and Exchange Board of India (SEBI) has issued a circular announcing amendments to the guidelines for preferential issues and institutional placement of units by listed Real Estate Investment Trusts (REITs).
The circular modifies the pricing of units and provides clarity on relevant dates for institutional placement.
The circular modifies Clause 2 of Annexure II of the previous guidelines issued by SEBI. It states that the institutional placement should be made at a price not lower than the average of the weekly high and low closing prices of units of the same class quoted on the stock exchange during the two weeks preceding the relevant date. The REIT is allowed to offer a discount of up to five per cent on the calculated price, subject to approval from unitholders through a resolution. This amendment aims to provide greater flexibility and transparency in determining the pricing of units during institutional placements. By considering the average prices over a two-week period, it helps to prevent undue fluctuations and ensures a fair valuation for investors. The option to offer a discount provides an additional incentive for investors, potentially attracting more participation in institutional placements.
The circular emphasizes that the amendments are applicable with immediate effect.
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