SEBI Update: Manner of achieving minimum public unitholding – InvITs and REITs

SEBI provided methods that can be adopted by real estate investment trusts and infrastructure investment trusts to achieve minimum public unitholding.

A REIT or an InvIT is required to achieve a minimum public unitholding of 25% within three years of listing. The market regulator has now prescribed eight methods by which this can be achieved. It has also allowed REITs and InvITs to use any other board-approved method.

The methods laid down by the Securities and Exchange Board of India include:

Issuance of units to the public through an offer document

An offer-for-sale route, where the sponsor, manager, or related parties can offer their units to the public—either through a public document or through a stock exchange route.

Rights issues and bonus issues of shares. Sponsors and managers will have to forego their entitlement to units.

Sale of units held by sponsors, managers, or their related parties in the open market. This can be up to 2%, subject to five times the average monthly trading volume in a given fiscal. Or up to 5% if the public shareholding becomes 25% after the sale.

Transferring shares held by the promoter to an exchange-traded fund, subject to a maximum cap of 5% of their paid-up unit capital.

Link:View Circular minimum-public-unitholding-invits_73149.html