Guidelines for InvITs issued: SEBI
The Securities and Exchange Board of India (Sebi) on Thursday released draft guidelines for infrastructure investment trusts (InvITs). This is expected to enable financing and investment opportunities in long-term infrastructure projects.
The finance minister Arun Jaitley made some draft guidelines during the Budget speech last week. SEBI is supposed to follow those draft guidelines.
InvITs are designed to get tax benefits and will collect funds for investments in infrastructure projects, including PPP (public-private partnership). SEBI also mentioned that these InvITs can be listed on the stock exchanges.
At the time of initial offer of units, the proposed holding of an InvIT in the underlying assets shall be a minimum Rs 500 crore and the offer size of the InvIT shall not be less then Rs 250 crore. The guidelines state that a designated sponsor with a minimum net worth of Rs 10 crore (if it is a body corporate or a company) will be eligible for InvITs. SEBI also mentioned that a designated sponsor should have minimum net tangible assets of Rs 10 crore (in case it is a Limited Liability Partnership).
Apart from the financial credibility, the developer needs to have technical credibility too. In the case where a sponsor is a developer, he must possess minimum experience of five years and at least two projects having achieved financial closure.
Source- The Financial Express
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