Investments by FPIs in REITs, InvIts, AIFs and corporate bonds under default
Summary
This circular permits Foreign Portfolio Investors to invest in units of REITs, InvIts, and Category III AIFs subject to specific conditions. It also allows FPIs to acquire corporate bonds or NCDs that are under default, provided they adhere to revised maturity and disclosure requirements. The regulatory framework for these investments is established under the SEBI Act, 1992.
Text
it has been decided to permit FPIs to invest in units of REITs, InvIts and Category III AIFs in terms of Regulation 21 (1) (n) of SEBI (FPI) Regulations, 2014 subject to such other terms and conditions as may be prescribed by SEBI from time to time.
A FPI shall not hold more than twenty five percent stake in a category III AIF.
FPIs shall be permitted to acquire NCDs/bonds, which are under default, either fully or partly, in the repayment of principal on maturity or principal installment in the case of an amortising bond.
Such NCDs/bonds restructured based on negotiations with the issuing Indian company, shall have a minimum revised maturity period of three years.
The FPIs shall disclose to the Debenture Trustees, the terms of their offer to the existing debenture holders/beneficial owners of such NCDs/bonds under default, from whom they propose to acquire.
All investments by FPIs in such bonds shall be reckoned against the extant corporate debt limit of INR 244,323 cr.
This circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Source: SecMarx — Investments by FPIs in REITs, InvIts, AIFs and corporate bonds under default. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.