Guidelines for preferential issue of units and institutional placement of units by a listed Real Estate Investment Trust- (Securities and Exchange Board of India) (27 Nov 2019)
Regulation 2(1)(zd) of Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014 ("REIT Regulations"), defines a "preferential issue" as an issue of units to a select persons on a private placement basis. This circular details the guidelines in respect of a preferential issue of units and institutional placement of units by a listed REIT.
1. "Institutional Placement" shall mean a preferential issue of units by a listed REIT only to Institutional Investors, as defined under REIT Regulations or circulars issued thereunder.
Conditions for issuance
2. A listed REIT may make a preferential issue of units or an institutional placement of units under these guidelines, if it satisfies the following conditions:
2.1. A resolution of the existing unitholders approving the issue of units, in accordance with Regulation 22(6) of the REIT Regulations has been passed.
2.2. Units of the same class, which are proposed to be allotted have been listed on a stock exchange for a period of at least six months prior to the date of issuance of notice to its unit holders for convening the meeting to pass the resolution in terms of clause 2.1 above:
Provided in case of issuance of units through "institutional placement" the minimum listing period required shall be 12 months.
2.3. The REIT has obtained in principle approval of the stock exchange(s) for listing of units proposed to be issued under these guidelines.
2.4. The REIT is in compliance with all the conditions for continuous listing and disclosure obligations under the REIT Regulations and circulars issued thereunder.
2.5. None of the respective promoters or partners or directors of the sponsor(s) or manager or trustee of the REIT is a fugitive economic offender declared under section 12 of the Fugitive Economic Offenders Act, 2018 (17 of 2018).
2.6. The REIT shall not make any subsequent institutional placement until the expiry of six months from the date of the prior institutional placement made pursuant to one or more special resolutions.
Manner of issuance of units
3. Any issuance of units under these guidelines shall be done in the following manner:
3.1. The units shall be allotted in the dematerialized form only and shall be listed on the stock exchange(s) where the units of the REIT are listed.
3.2. Any offer or allotment through private placement shall not be made to more than 200 investors (excluding institutional investors) in a financial year.
3.3. Other than to the extent of the issue of units that is proposed to be made for consideration other than cash, full consideration for the units issued shall be paid by the prospective allottees prior to the allotment of the units, through banking channels. All such monies shall be kept by the Trustee in a separate bank account in the name of the REIT and shall only be utilized for adjustment against allotment of units or refund of money to the applicants till the time such units are listed.
3.4. The minimum allotment and trading lot for units issued shall be equivalent to the minimum allotment and trading lot as applicable to the units of the same class, under the extant provisions of the REIT Regulations or circulars issued thereunder.
3.5. Post allotment, the REIT shall make an application for listing of the units to the stock exchange(s) and the units shall be listed within seven days from the date of allotment:
Provided that where the REIT fails to list the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the allotment, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT and the manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum.
3.6. The REIT shall file an allotment report with SEBI within seven days of allotment of the units providing details of the allottees and allotment made. Placement document, if applicable, shall also be filed with the Board along with the allotment report.
3.7. The issue of units shall comply with the conditions and manner of allotment for preferential issue units and institutional placement as provided in Annexure-I and Annexure-II & III, respectively.
Tags : GUIDELINES FOR PREFERENTIAL ISSUE OF UNITS AND INSTITUTIONAL PLACEMENT OF UNITS BY A LISTED REAL ESTATE INVESTMENT TRUST