New Delhi, January 19, 2018

To make REITs and InvITs more attractive, markets regulator Sebi has allowed strategic investors like registered NBFCs and international multilateral financial institutions to invest up to 25 per cent of the total offer size of such trusts.

"The strategic investor(s) shall, either jointly or severally, invest not less than 5 per cent and not more than 25 per cent of the total offer size," Securities and Exchange Board of India (Sebi) said in a circular.

The units subscribed by strategic investors, pursuant to the unit subscription agreement, will be locked in for 180 days from the date of listing in the public issue.

Further, Sebi has put in place operational modalities required for the participation by the strategic investors in (Real Estate Investment Trusts) and InvITs (Infrastructure Investment Trusts).

Under the rules, the manager on behalf of the InvIT/REIT will have to enter into a binding unit  subscription agreement with the strategic investor who proposes to invest in the public issue of such trusts.

The draft offer document would disclose details of the unit subscription agreement. These include names of each strategic investor, number of units proposed to be subscribed by it and the investment amount and proposed subscription price per unit.

The subscription price per unit payable by the strategic investor will be set out in the unit subscription agreement and the entire subscription price will be deposited in a special escrow account prior to opening of the public issue.

The price at which the strategic investor has agreed to buy units of such trusts should not be less than the issue price determined in the public issue.

[The Economic Times]