REIT Listings to be Conducted with Greater Transparency
Reports received from a senior executive of the Securities and Exchange Board of India (SEBI) revealed that a greater deal of transparency will be ushered in by the Real Estate Investment Trusts with the objective of attracting more global funds.
Several norms for the listing of business trust structures, REITs and Infrastructure Investment Trust were announced by the SEBI in September. The new norms listed were aimed at providing greater transparency in dealings of the realty and infrastructure sectors and is believed to bring in more funds on a global basis. These structures approved by the regulator in August have also been promised to receive tax incentives.
Attracting funds: SEBI Executive Director, Ananta Barua states that tax incentives will serve as the key to the success of REITs and INVITs and thereby attract global funds in a transparent manner in the realty and infrastructure sectors. Compulsory listing of REITs can also bring in more transparency in the Indian markets, believes Ananta Barua. These were stated by the Director at the real estate event organised by the RICS on Wednesday.
Steps Taken:
SEBI Board has already had talks with the Finance Ministry which plans to introduce tax incentives as per the plan.
The steps taken are still in the instrumentation stage expects to make a successful take-off.
Stages of Taxation: the taxation policy shall comprise of 4 stages and involved in 2 trusts. Each of these stages are heavy stages and thus require time and planning and have to be addressed first.
- First is structuring and transferring assets to REITs or InvITs
- Distribution of income to investors
- During Trade
- When there will be an exit
The trusts for both is been estimated to be worth Rs.250 crore and will have a public float of at least 25 per cent. The minimum asset base for each of these trusts in order to be listed has been estimated to be Rs.500 crore.
RICS Global managing director, Sachin Sandhir is reported to have stated that the government’s move is laudable and that this twin objective will help in spurring growth and in turn, infuse more liquidity into the real estate market.
Source: NDTV Profit
Finance ministry, Infrastructure Investment Trust, InvITs, REITS, SEBI, SEBI Executive Director, Securities and Exchange Board of India
