Market regulator Sebi on Friday notified norms for listing of business trust structures, REITs and InvITs that would help attract more funds in a transparent manner into realty and infrastructure sectors.
Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvITs), whose norms were approved by the regulator in August, would get tax incentives.For both trusts, the minimum initial offer size should be Rs250 crore with a public float of at least 25 per cent, according to the Securities and Exchange Board of India (Sebi).
The minimum asset base for these trusts to get listed is Rs500 crore.To ensure transparency, these trusts would be subject to stringent norms on disclosure as well as related party transactions.In separate but similarly-worded regulations for the two trusts, Sebi said that all related party transactions should be at “arms-length” in accordance with relevant accounting standards.
REIT and InvIT are required to make investments either directly or through Special Purpose Vehicles. In case of PPP projects, money can be put in only through SPV.In the case of REITs, the minimum public holding should be 25 per cent while the total number of outstanding units at all times as well as the number of unit holders -- who are part of the public -- should be 200.
Under both the initial offer and follow-on public offer, the REIT shall not accept subscription of an amount less than two lakh rupees from an applicant, as per the norms.
Sebi has said that at least 80 per cent of the value of REIT assets should be invested in completed and rent generating properties.REIT is barred from investing in vacant land or agricultural land or mortgages other than mortgage backed securities.