Sebi proposes new norms for public issue of REITs

To provide new avenues for raising funds, capital markets regulator Sebi on Thursday proposed fresh norms for the public issue of Real Estate Investment Trusts (REITs), including cap of 75 per cent allocation to institutional buyers.

The Securities and Exchange Board of India (Sebi) said the proposed norms for the public issuance of REITs relate to appointment of merchant bankers, disclosures in the offer documents and filing of draft papers, keeping them in the public domain for at least 21 days. For an issue made through the book building process or otherwise, the allocation in the public issue should be maximum 75 per cent to qualified institutional buyers (QIBs) and at least 25 per cent to other investors, Sebi said. Investment manager can allocate up to 60 per cent of the portion available for allocation to QIBs to anchor investors, subject to certain conditions.

An Anchor Investor should make an application for at least Rs 10 crore in the public issue and allocation to such investors should be on a discretionary basis and subject to the minimum of two investors for allocation up to Rs 250 crore and five such investors for over Rs 250 crore. Issuing the draft paper, Sebi said that REITs will need to deposit, before the opening of subscription, and keep deposited with the stock exchange, an amount calculated at the rate of 0.5 per cent of the amount of units offered for subscription to the public.

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, Sebi said.