SEBI Notifies Norms Allowing REITs, InvITs To Issue Bonds
SEBI has relaxed norms to make these trusts more attractive for investors.
To make REITs and InvITs more attractive to investors, markets regulator Securities and Exchange Board of India has relaxed norms allowing these trusts to raise funds by issuing debt securities.
Real Estate Investment Trusts and Infrastructure Investment Trusts, whose units are listed on a recognised stock exchange, may issue debt securities in the manner specified by the board provided that such debt securities shall be listed, SEBI said in a notification. This would be applicable for all REITs and InvITs which are listed on the stock exchanges.
SEBI has amended regulations for such trusts to facilitate growth, the notification said.
The market watchdog said debt securities are non-convertible ones which create or acknowledge indebtedness. These include debentures, bonds and such other securities of a corporate or a trust registered with SEBI as InvIT or REIT.
However, it excludes bonds issued by the government, security receipts and securitised debt instruments.
The Securities and Exchange Board of India has also amended the definition of valuer for both REITs and InvITs.
Regarding REITs, SEBI has allowed strategic investors like registered non-banking financial corporations, scheduled commercial banks and international multilateral financial institutions to participate in the public issues of such trusts. Such investors are already allowed in InvITs.
Now, an REIT would require a single asset under it from the current two projects. This is on similar lines of an InvIT. SEBI has also allowed REITs to lend to the underlying holding company.
The regulator had notified REITs and InvITs Regulations in 2014, allowing setting up and listing of such trusts which are very popular in some advanced markets. However, only two InvITs - IRB InvIT Fund and Indiagrid Trust - have got listed on stock exchanges so far and not a single REIT has been listed in the country.
