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Tuesday, 19 September 2017

Sebi eases fundraising norms for REITs, InvITs - News By Money Maker Research

The SEBI has revised rules governing real estate investments trusts (REITs) and infrastructure investment trusts (InvITs), permitting them to raise funds through debt securities and single-asset REITs to help boost the financial instruments.  

Since three years, there were only two InvITs have listed on the stock exchanges viz. IRB InvIT Fund and India grid Trust. It was earlier reported by mint news that although no REIT has been issued yet, the Embassy Office Parks REIT becoming the first realty trust in the country to be registered with the Sebi.

As per Sebi statement, REITs and InvITs listed on national stock exchanges will be allowed to issue debt via debt securities.

Presently the REITs & InvITs are permitted to raise funds via External Commercial Borrowings (ECB) having bind with end-use restrictions.

Permitting REITs to lend to holding companies will result in efficient fund flows, and the regulator also proposes to allow REITs with 50 – 50 percent shareholding. The current norm requires a REIT to have a holding company with a 51 percent stake.
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