The Securities and Exchange Board of India (SEBI) on March 13, 2020, has decided to amend the guidelines for rights issue, preferential issue and institutional placements of units by listed Infrastructure Investment Trusts (InvIT).
SEBI had issued guidelines for rights issue of units by a listed vide Circular SEBI/HO/DDHS/DDHS/CIR/P/2020/10 dated January 17, 2020. SEBI has decided that an InvIT desirous of issuing units under fast track rights issue should follow the below mentioned conditions:-
1.The units of the InvIT have been listed on any stock exchange for a period of at least 3 years immediately precfeding the record date;
2.All the units of the InvIT are held in demat form on the record date;
3.The average market capitalisation of public unitholding of the InvIT is at least Rs. 250 crore;
4.The InvIT is in compliance with the listing and disclosure requirements of the InvIT Regulations;
5.The InvIT has redressed at least 95% of the complaints received from the investors till the end of the quarter immediately preceding the month of the record date;
6.No show-cause notices have been issued or prosecution proceedings have been initiated by the Board and pending against the InvIT, parties to the InvIT or their respective promoters or partners or directors as on the record date;
7.The InvIT, parties to the InvIT or their respective promoters or partners or directors has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during 3 years immediately preceding the record date;
8.Units of the InvIT have not been suspended from trading as a disciplinary measure during last 3 years immediately preceding the record date;
9.No regulatory action has been imposed on the InvIT in the 3 years preceding the year in which rights issue is proposed;
10.There shall be no conflict of interest between the lead merchant banker(s) and the InvIT or its associates;
11.The sponsor(s) shall mandatorily subscribe to their rights entitlement and shall not renounce their rights;
12.There are no audit qualifications on the audited accounts of the InvIT in respect of those financial years for which such accounts are disclosed in the letter of offer;
SEBI has also modified the Annexure I (Manner of preferential issue of units by a listed InvIT) and Annexure III (Disclosures to be made by the issuer) of guidelines for preferential issue and institutional placement of units by listed InvITs issued vide Circular SEBI/HO/DDHS/DDHS/CIR/P/2019/143 dated November 27, 2019.
[SEBI Circular No. SEBI/HO/DDHS/DDHS/CIR/P/2020/36]
