Amendment to Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024
Summary
SEBI amends the Master Circular for Infrastructure Investment Trusts to align lock-in provisions for preferential issues with initial offer requirements. The amendment introduces a tiered lock-in structure based on project manager status and permits inter-se transfers of locked-in units among sponsor groups. Additionally, new guidelines are established for follow-on offers, detailing procedural requirements, disclosure norms, and restrictions on further unit issuance.
Text
The units allotted to sponsor(s) and sponsor group(s) shall be locked-in as under: a) fifteen percent... locked-in for a period of three years... subject to the condition that the project manager... is the sponsor or an associate... Provided that twenty-five percent... shall be locked-in for a period of three years... if the condition specified above relating to project manager... is not satisfied; b) the remaining units... shall be locked-in for a period of one year...
Units allotted under a preferential issue to a sponsor or its sponsor group entities which are subject to lock-in, may be transferred among such sponsor or its sponsor group entities, subject to the condition that the lock-in on such units shall continue for the remaining period with the transferee...
The provisions specified in Chapter 2 of this Master Circulars which are applicable for public issue of units of InvIT are also applicable for follow-on offer by an InvIT.
For issuing units through a follow-on offer, the InvIT shall pay fees to the Board as specified in Schedule II of InvIT Regulations along with follow-on offer document / draft follow-on offer document, as applicable.
An InvIT desirous of issuing units by way of follow-on offer shall, for any such issue, ensure that: 2.19.1. It has made an application to all stock exchanges... to seek an in-principle approval... and has chosen one of them as the designated stock exchange. 2.19.2. Units shall be issued mandatorily in dematerialized form.
The Investment Manager and the merchant banker(s) shall be responsible for obtaining in-principle approval and final listing and trading approvals from the stock exchange(s).
The amount for general purposes, as mentioned in objects of the issue in the follow-on offer document filed with the Board shall be as specified under clause (va) of sub-regulation (4) of Regulation 14 of the InvIT Regulations.
The minimum public unitholding shall be at least twenty-five percent of the total outstanding units of the InvIT on post issue basis.
The provisions of Regulation 15 of the InvIT Regulations shall be applicable for follow-on offer document and advertisements in relation to a follow-on offer.
The timelines for allotment and listing of units of InvIT shall be as per the timelines specified in case of initial public offer as mentioned in Chapter 2 of the Circular on Master Circular for InvITs.
The provisions specified under clauses (t) and (u) of sub-regulation (4) of Regulation 14 of the InvIT Regulations shall be applicable mutatis mutandis pertaining to, payment of interest in relation to a follow-on offer in case of failure to allot or list units.
An InvIT shall not undertake any further issue of units in any manner whether by way of public issue, rights issue, preferential issue, institutional placement or otherwise, except pursuant to a unit based employee benefit scheme (if any) during the period between the date of filing of the draft follow-on offer document/ follow-on offer document for follow-on offer and the listing of the units or refund of application monies:
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Source: SecMarx — Amendment to Master Circular for Infrastructure Investment Trusts (InvITs) dated May 15, 2024. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.