In a recent development, the Securities and Exchange Board of India (SEBI) has released a new circular addressing modifications in the Offer for Sale (OFS) framework concerning units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). The change is predominantly rooted in feedback received from market participants.
The circular notably revises Paragraph B of a previous circular dated January 10, 2023, to now include OFS for units of private listed InvITs. The OFS framework is expected to be on par with the framework outlined for equity shares of listed companies. However, with respect to listed InvITs, it’s stated that the trading lot will remain the same as the lot prescribed for such InvITs in the secondary market, as per the SEBI (Infrastructure Investment Trusts) Regulations, 2014. It’s also specified that provisions related to retail investors are not applicable in this case, and the OFS will stay open for just one day (i.e., T day).
Securities and Exchange Board of India
Circular No. SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/134 Dated: August 03, 2023
To
All Recognised Stock Exchanges
All Recognised Clearing Corporations
All Depositories
Madam/Sir
Sub: Offer for Sale framework for sale of units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
1. SEBI vide Circular No.SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated January 10, 2023 specified the comprehensive framework on Offer for Sale (OFS) of shares including units of REITs and InvITs through stock exchange mechanism.
2. Based on the feedback received from market participants, it has been decided to modify Paragraph B of SEBI Circular dated January 10, 2023 to allow OFS for units of private listed InvITs, as under:
“B. OFS Framework for sale of units of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
1.0 OFS for sale of units of REITs and In vI Ts by sponsor(s) or sponsor group entities, and other unitholders are permitted only in units of listed REITs and listed InvITs. The OFS framework for REITs and InvITs shall be equivalent to the OFS framework prescribed at paragraph-A above for equity shares of listed companies.
Provided that in case of OFS for listed InvITs, the trading lot shall be same as the trading lot prescribed for such InvITs in the secondary market in terms of SEBI (Infrastructure Investment Trusts) Regulations, 2014. Provided further that since there is no participation of retail investors in private listed InvITs, the provisions related to retail investors as specified in paragraph-A above shall not be applicable in case of OFS for such InvITs and the OFS shall remain open only for one day (i.e. T day).”
3. The provisions of this circular shall come into force with immediate effect.
4. All recognized stock exchanges are advised to:
a) take necessary steps and put in place necessary systems for implementation of the above.
b) make necessary amendments to the relevant bye-laws, rules and regulations, wherever required, for the implementation of the above; and
c) bring the provisions of this circular to the notice of market participants (including investors) and also to disseminate the same on their website;
5. This circular is issued in exercise of the powers conferred under Section 11(1) of the Securities and Exchange Board of India Act,1992 to protect the interest of investors in securities and to promote the development of and to regulate the securities market.
6. This circular is available on SEBI website at www.sebi.gov.in at “Lega Framework-Circulars.”
Yours faithfully,
Hruda Ranjan Sahoo
Deputy General Manager
Tel no.: 022-26449586
Email: hrsahoo@sebi.gov.in
