REIT and InvIT norms are finalised by SEBI
The REIT (Real Estate Investment Trusts) norms will be more attractive now and the capital markets regulator SEBI (Securities and Exchange Board of India) has agreed to incorporate the industry suggestions. The minimum asset size will be reduced to Rs 500 crore, and foreign investors at IPO and later stages will be allowed.
At the same time SEBI is keen on REITs being limited to larger investors in the initial stages. Since the REITs are associated with higher risks, until the market testing is over, SEBI wants to involve larger investors only in the process. The minimum investment amount would remain higher at Rs 2 lakh.
This Sunday the SEBI board is likely to take a decision on the final REIT regulations, along with that for another new product Infrastructure Investment Trusts (InvITs). Along with the foreign investors, domestic institutions like insurers, pension funds and provident funds would also be allowed to invest in these trusts.
To meet the infrastructure investment requirements to the tune of Rs 65 lakh crore for the 12th Five Year Plan (2012-17), SEBI is aiming to create a new avenue for raising funds through InvITs.
The new norms would enable listing and trading of REITs and InvITs as any other security on the stock exchange platforms. This will also help to create new platforms for raising of funds by the real estate and infrastructure companies.
Source- The Financial Express
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