The Securities and Exchange Board of India on Thursday said the time taken for allotment and listing of REITs (real estate investment trusts) and InvITs (infrastructure investment trusts) after the closure of issue would be reduced to six working days, against the current requirement 12 working days. The new rules will be applicable to the public issues of REITs and InvITs which open on or after June 1, 2022, Sebi said in two separate circulars.
Both REITs and InvITs are investment vehicles similar to mutual funds, wherein sponsors/managers pool money from investors, which is further invested in real estate and infrastructure projects. According to an EY report released last year, REITs and InvITs have raised capital of over $4 billion in India, while the combined market capitalisation of the three listed REITs in India has surged over $7 billion. As of March 2021, 6 InvITs and 3 REITs are listed on the exchanges.
Sebi on Thursday said the move is to further streamline the process of public issues of these investment vehicles. Further, the regulator has asked self certified syndicate banks (SCSBs), stock exchanges, depositories and intermediaries to coordinate and ensure completion of listing (through the public issue), and commencement of trading of units of REITs and InvITs within six working days from the date of closure of the issue.
In August last year, the markets regulator had amended the regulations of these two investment vehicles to enhance their reach to a larger set of investors. Sebi reduced the minimum application amount for REITs from Rs 50,000 to Rs 10,000-15,000. Further, the trading lot size of REITs was reduced from 200 earlier to single unit. The amendments were made to attract retail investors who restricted themselves from investing in such investment vehicles due to high entry barrier.