New Delhi: Aiming to make REITs and InvITs more attractive to investors, markets regulator Sebi plans to relax norms to allow these trusts to raise funds by issuing debt securities.
A proposal to amend REITs (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts) would be placed before Sebi's board on Monday in order to facilitate growth of such trusts, an official said.
Securities and Exchange Board of India had notified the REITs and InvITs Regulations in 2014, allowing setting up and listing of such trusts, which are very popular in some advanced markets. However, only two InvITs -- IRB InvIT Fund and Indiagrid Trust -- got listed on the stock exchanges so far. Several attempts are already being made to garner due attention from business houses in the country but all the efforts failed leading to Sebi reconsidering the proposal to give further relaxations.
According to the proposal, REITs and InvITs, whose units are listed in nationwide stock exchanges can issue debt securities.
Besides, the regulator plans to allow such trusts to invest in holding company with 50 per cent stake. Regarding REITs, Sebi has proposed to allow 'strategic investors' like registered NBFC, scheduled commercial bank, and international multilateral financial institutions to participate in the public issues of such trusts. Such investors are already allowed in InvITs.
The regulator may do away with the requirements of at least two assets and the percentage restrictions on a single assets. It may allow REITs to be floated with a single asset.
Currently, a REIT requires to hold at least two projects, directly or through 'holding' company, with one project not more than 60 per cent of the total value of the REIT assets.
Also, it plans to allow such trusts to lend to the underlying holding company.