SEBI Master Circular for Real Estate Investment Trusts (REITs) – July 2023

editor3 06 Jul 2023 1,404 Views 0 comment Print SEBI | Master Circulars, Notifications/Circulars

Sponsored

The Securities and Exchange Board of India (SEBI) has released the Master Circular for Real Estate Investment Trusts (REITs) in July 2023. The circular incorporates all the applicable circulars issued by SEBI until the specified date, providing stakeholders easy access to the regulations and guidelines governing REITs.

SEBI’s Master Circular for REITs aims to ensure effective regulation and compliance in the real estate investment sector. It consolidates all the relevant circulars issued by SEBI, providing a comprehensive reference for stakeholders. The circular supersedes previous circulars mentioned in the appendix, and its provisions come into force immediately. It clarifies that actions taken under superseded circulars shall be considered under the corresponding provisions of the Master Circular. The circular emphasizes the need for compliance reporting and advises stock exchanges to disseminate its contents.

Full Text of the Master Circular is as follows:-

Securities and Exchange Board of India

Master Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/116 Dated: July 06, 2023

To,
All Real Estate Investment Trusts (“REITs”)
All Parties to REITs
All Recognised Stock Exchanges
All Registered Depositories
All Self-Certified Syndicate Banks
All Registered Depository Participants, Stock brokers, Registrars to an Issue, Share Transfer Agents, Bankers to issues, Merchant Bankers and other Intermediaries

Madam/ Sir,

Sub: Master Circular for Real Estate Investment Trusts (REITs)

1. For effective regulation of Real Estate Investment Trusts, Securities and Exchange Board of India (SEBI) has been issuing various circulars from time to time. In order to enable the stakeholders to have an access to all the applicable circulars at one place, the provisions of the circulars issued till July 06, 2023 are incorporated in this Master Circular for Real Estate Investment Trusts.

2. This Master Circular shall come into force from the date of its issuance. The circulars mentioned in Appendix to this Master Circular shall stand superseded with the issuance of this Master Circular. With respect to the directions or other guidance issued by SEBI, as specifically applicable to Real Estate Investment Trusts, the same shall continue to remain in force in addition to the provisions of any other law for the time being in force. Terms not defined in this Master Circular shall have the same meaning as provided under the relevant Regulations.

3. Notwithstanding such supersession,

3.1. anything done or any action taken or purported to have been done or taken under the superseded circulars, including registrations or approvals granted, fees collected, registration suspended or cancelled, any inspection or investigation or enquiry or adjudication commenced or show cause notice issued prior to such supersession, shall be deemed to have been done or taken under the corresponding provisions of this Master Circular;

3.2. any application made to SEBI under the superseded circulars, prior to such supersession, and pending before it shall be deemed to have been made under the corresponding provisions of this Master Circular;

3.3. the previous operation of the superseded circulars or anything duly done or suffered thereunder, any right, privilege, obligation or liability acquired, accrued or incurred under the superseded circulars, any penalty, incurred in respect of any violation committed against the superseded circulars, or any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty as aforesaid, shall remain unaffected as if the superseded circulars have never been superseded;

4. Pursuant to issuance of this Master Circular, the entities which are required to ensure compliance with various provisions shall submit necessary reports as envisaged in this Master Circular on a periodic/ continuous basis. Stock exchanges are advised to disseminate the contents of this Circular on their website.

5. This Master Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 33 of the SEBI (Real Estate Investment Trusts) Regulations, 2014 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. This Master Circular is issued with the approval of the Competent Authority.

6. This Master Circular is available on the SEBI website at https://www.sebi.gov.in/under the category “Legal -> Master Circulars

Yours faithfully,

Ritesh Nandwani
Deputy General Manager
Department of Debt and Hybrid Securities
Tel no.: 022-2644 9696
Email: riteshn@sebi.gov.in

Read Full Text at following link: https://www.sebi.gov.in/legal/master-circulars/jul-2023/master-circular-for-real-estate-investment-trusts-reits-_73585.html

Table of Contents

MASTER CIRCULAR

SEBI/HO/DDHS-PoD-2/P/CIR/2023/116 July 06, 2023

To,

All Real Estate Investment Trusts (“REITs”)

All Parties to REITs

All Recognised Stock Exchanges

All Registered Depositories

All Self-Certified Syndicate Banks

All Registered Depository Participants, Stock brokers, Registrars to an Issue, Share Transfer Agents, Bankers to issues, Merchant Bankers and other Intermediaries

Madam/ Sir,

Sub: Master Circular for Real Estate Investment Trusts (REITs)

3. Notwithstanding such supersession,

5. This Master Circular is issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 33 of the SEBI (Real Estate Investment Trusts) Regulations, 2014 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market. This Master Circular is issued with the approval of the Competent Authority.

6. This Master Circular is available on the SEBI website at https://www.sebi.gov.in/under the category “Legal -> Master Circulars

Yours faithfully,

Ritesh Nandwani
Deputy General Manager
Department of Debt and Hybrid Securities
Tel no.: 022-2644 9696
Email: riteshn@sebi.gov.in

Chapter 1 . Online Filing System for REITs¹

1.1. In order to facilitate ease of operations in terms of applying for registration, reporting and various compliances under SEBI (Real Estate Investment Trusts) Regulations, 2014 (REIT Regulations), SEBI has introduced an online system for filings related for REITs. The online system can be used for application for registration, reporting and filing under the provision of aforesaid Regulations.

1.2. All applicants desirous of seeking registration as REITs are now required to submit their applications online only, through SEBI Intermediary Portal at https://siportal.sebi.gov.in. Furthermore, all SEBI registered REITs are required to ile/ submit/ apply for any request, as may be required under the provision of REIT Regulations & Circulars issued thereunder, through the online system only. The aforesaid online filing system has been made operational.

1.3. Link for SEBI Intermediary Portal is also available on SEBI website – www.sebi.gov.in. In case of any queries and clarifications, users may refer to the manual provided in the portal or contact the Portal Helpline as specified in the manual.

Chapter 2. Guidelines for public issue of units of REITs²

2.1 . Appointment and obligations of merchant banker and others:

2.1.1. The Manager on behalf of the REIT, in line with Regulation 10 (5) of SEBI REIT Regulations, shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the lead merchant banker, to carry out the obligations relating to the issue.

2.1.2. Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document.

2.2. Filing of offer document

2.2.1. Draft offer document, offer document and final offer document shall mean as under:

a) Draft offer document refers to the draft of the offer document filed with the
Board and the stock exchanges.

b) Offer document refers to the version of the offer document filed with the Board and the stock exchanges incorporating all updations except the price / price band.

c) Final offer document refers to the version of the offer document filed with the Board and the stock exchanges including details with respect to pricing, allotment etc.

2.2.2. The draft offer document shall be filed with the Board and the designated stock exchanges in accordance with REIT Regulations.

2.2.3. The lead merchant bankers shall submit the following to the Board along with the draft offer document:

a) a certificate, confirming that an agreement has been entered into between the Manager on behalf of the REIT and the lead merchant bankers;

b) a due diligence certificate as per Form A of Annexure – 1.

2.2.4. The draft offer document shall be hosted on the websites as specified under Regulation 14(5) of the REIT Regulations and the period of hosting on the website for comments, if any, shall be at least twenty-one days. The lead merchant banker shall file a statement with the Board giving information of the comments received by them or the REIT or the parties to the REIT on the draft offer document during that period and the consequential changes, if any, to be made in the draft offer document.

2.2.5. Subject to regulation 14(7), (8) and (9) of REIT Regulations, the Board may specify changes or issue observations, if any, on the draft offer document within the later of the following:

a) thirty days from the later of the following dates:

i. the date of receipt of the draft offer document by the Board; or

ii. the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or agency; or

iii. the date of receipt of a copy of in-principle approval letter issued by
the recognised stock exchanges;

b) twenty one working days from the date of receipt of satisfactory reply from the lead merchant bankers, where the Board has sought any clarification or additional information from them;

2.2.6. The merchant banker(s) shall ensure that all comments received from the Board on the draft offer document are suitably addressed prior to the filing of the offer document with the Board and designated stock exchanges;

2.2.7. The lead merchant banker shall submit the following documents to the Board along with the offer document:

a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document;

b) a due diligence certificate as per Form B of Annexure – 1

2.2.8. If changes are made in the draft offer document or offer document with respect to any of the following, the lead merchant banker shall file fresh draft offer document with the Board highlighting all changes made in the draft offer document or offer document, as applicable, along with the fees as specified in REIT Regulations:

a) Change in sponsor(s), sponsor group, Manager or persons in control of the sponsor(s)/ Manager.

Provided that, in case of change in sponsor group, fresh filing shall be applicable only if the involved sponsor group entity(ies) hold/propose to hold more than 5% of the total units of the REIT after initial offer on a post-issue basis.

b) Change in more than half of the board of directors of the Manager.

c) Change in any object(s) of the issue contributing/amounting to more than 20% of the issue size.

d) Any increase or decrease in estimated issue size by more than twenty five per cent.

2.2.9. All other changes/ updations in the draft offer document or offer document which are not covered under clause 2.2.8 above shall be carried out by the lead merchant banker and offer document with updated details shall be filed with the Board without fees.

2.2.10. The manager shall, after filing the offer document with the Board, make a pre-issue advertisement on the website of the sponsor, manager and stock exchanges.

2.2.11 . The manager may also issue such pre-issue advertisement in any newspaper and on the website of the RE IT, if applicable.

2.3. Allocation in public issue

2.3.1. In an issue made through the book building process or otherwise, the allocation in the public issue shall be as follows:

a) not more than 75% to Institutional Investors

b) not less than 25% to other investors

[Explanation: Institutional investors is as defined under Regulation 2(1 )(y) of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.]³

2.3.2. Manager of the REIT in consultation with merchant banker(s) may allocate upto 60% of the portion available for allocation to Institutional Investors to anchor investors as under:

a) An Anchor Investor shall make an application of a value of at least Rs. 10 crore in the public issue;

b) Allocation to Anchor Investors shall be on a discretionary basis and subject to the minimum of 2 investors for allocation up to Rs. 250 crore and minimum of 5 investors for allocation of more than Rs. 250 crore.

[Provided that in case of strategic investor, the aforesaid application value shall be subject to Regulation 2(1 )(ztb) of the REIT Regulations.]⁴

c) The bidding for Anchor Investors shall open one day before the issue opening date and allocation to Anchor Investors shall be completed on the same day.

d) If the price fixed as a result of book building is higher than the price at which the allocation is made to Anchor Investor, the Anchor Investor shall bring in the additional amount within two days of the date of closure of the issue. However, if the price fixed as a result of book building is lower than the price at which the allocation is made to Anchor Investor, the excess amount shall not be refunded to the Anchor Investor and the Anchor Investor shall take allotment at the price at which allocation was made to it.

e) The number of units allocated to Anchor Investors and the price at which the allocation is made, shall be made available on the website of the stock exchange(s), sponsor(s), manager and merchant banker(s)before opening of the issue.

f) There shall be a lock-in of 30 days on the units allotted to the Anchor Investor from the date of allotment in the public issue.

g) [Neither the merchant bankers(s) nor any associate of the merchant bankers, other than mutual funds sponsored by entities which are associate of the merchant bankers or insurance companies promoted by entities which are associate of the merchant bankers or pension funds of entities which are associate of the merchant bankers or Alternate Investment Funds (AIFs) sponsored by the entities which are associate of the merchant bankers or FPIs other than Category III sponsored by the entities which are associate of the merchant bankers, shall apply under the Anchor Investors category.]⁵

h) The parameters for selection of Anchor Investor shall be clearly identified by the merchant banker(s).

2.4. Application and Abridged version of the offer document.

2.4.1 . The application form and the abridged version of the offer document as stated in Regulation 14(13) of the REIT Regulations for the issue shall be prepared by the merchant banker(s).

2.4.2. The merchant banker(s) shall make arrangements for distribution of the application form along with a copy of the abridged version of the offer document.

2.4.3. The abridged version of the offer document shall contain the disclosures as specified in Annexure – 3 and shall not contain any matter extraneous to the contents of the offer document.

2.4.4. No person shall make an application in the public issue for that number of units which exceeds the number of units offered to public.

2.5. Security Deposit

2.5.1. The Manager on behalf of the REIT shall deposit, before the opening of subscription, and keep deposited with the stock exchange(s), an amount calculated at the rate of 0.5% of the amount of units offered for subscription to the public or Rs 5 crore, whichever is lower.

2.5.2. The manner of deposit/refund/release/forfeiture of such deposit shall be in the manner specified by the stock exchange(s)and by the Board from time to time.

2.6. Opening of an issue and subscription period.

2.6.1 . An issue shall be opened after at least five working days from the date of filing the offer document with the Board.

2.6.2. The lead merchant banker shall submit a due diligence certificate as per Form C of Annexure – 1, immediately before the opening of the issue.

2.6.3. A public issue shall be kept open for at least three working days but not more than thirty days. However, in case the price band in a public issue made through the book building process is revised, the bidding (issue) period disclosed in the final offer document shall be extended for a minimum period of one working day, provided however that the total bidding period shall not exceed thirty days.

Provided the price revision can be done maximum twice during the bidding period. [Provided further, that in case of force majeure, banking strike or similar circumstances, the REIT, for reasons to be recorded in writing, may extend the bidding (issue) period disclosed in the offer document, for a minimum period of three working days, subject to total bidding period not exceeding thirty days.]⁶

2.6.4. The manager on behalf of the REIT may issue advertisements for issue opening and issue closing.

2.7. Underwriting.

2.7.1. Where the REIT desires to have the issue underwritten, it shall appoint the underwriters in accordance with SEBI (Underwriters) Regulations, 1993.

2.7.2. The merchant banker(s) and syndicate members shall not subscribe to the issue in any manner except for fulfilling their underwriting obligations.

2.7.3. In case of underwritten issue, the lead merchant banker(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.

2.8. Price and price band

2.8.1. The manager on behalf of the REIT may determine the price of units in consultation with the merchant banker(s) or through the book building process. 2.8.2. Differential price shall not be offered to any investor.

2.8.3. The manager on behalf of the REIT shall announce the floor price or price band at least [two]⁷ working days before the opening of the bid (in case of an initial public offer) on the website of the sponsor, manager and stock exchanges and in all the newspapers in which the pre issue advertisement was released and website of RE IT, if applicable.

2.8.4. The announcement referred to in clause 2.8.3 above shall contain relevant financial ratios computed for both upper and lower end of the price band and also a statement drawing attention of the investors to the section titled “basis of issue price” in the offer document.

2.8.5. The floor price or price band and the relevant financial ratios referred to in clause 2.8.4 shall be disclosed on the websites of those stock exchanges where the units are proposed to be listed.

2.8.6. The floor price or price band shall be pre-filled in the application forms available on the websites of the stock exchanges.

2.8.7. The Manager on behalf of the REIT shall, in consultation with merchant banker(s), determine the issue price based on the bids received.

2.8.8. Once the final price (cut-off price) is determined, all those bidders whose bids have been found to be successful (i.e. at and above the final price or cut-off price) shall be entitled for allotment of units.

2.8.9. The merchant banker(s) may reject a bid placed by a qualified institutional buyer for reasons to be recorded in writing provided that such rejection shall be made at the time of acceptance of the bid and the reasons therefore shall be disclosed to the bidders.

2.9. Bidding process

2.9.1. [The REIT shall accept bids using only the Application Supported by Blocked Amount (ASBA) facility for making payment i.e. writing their bank account numbers and authorising the banks to make payment in case of allotment, by signing the application forms]⁸. [In addition, individual investors may apply in public issues of units of REITs with a facility to block funds through Unified Payments Interface (UPI) mechanism for application value upto Rs. 5 lakh. The process flow for availing the option of blocking funds through UPI mechanism is placed at Part A of Annexure – 11 .]⁹

2.9.2. [The bidding process shall be done only through an electronic bidding platform provided by recognised stock exchanges.]¹⁰

2.9.3. [Modes of application in public issue of units of REITs:

An investor may apply for public issue of units of REIT through any of the following modes:

a) Through Self-Certified Syndicate Bank (SCSB) or intermediaries (viz. Syndicate members, Registered Stock Brokers, Registrar and Transfer agent and Depository Participants)

(i) An investor may submit the bid-cum-application form, with ASBA as the sole mechanism for making payment, physically at the branch of a SCSB, i.e. investor’s bank. For such applications, the SCSB shall upload bid on the Stock Exchange bidding platform and block funds in investors account

(ii) An investor may submit the completed bid-cum-application form to the intermediaries mentioned above along with details of his/her bank account for blocking of funds. The intermediary shall upload the bid on the Stock Exchange bidding platform and forward the application form to a branch of a SCSB for blocking of funds.

(iii) An investor may submit the bid-cum-application form with a SCSB or the intermediaries mentioned above and use his / her bank account linked UPI ID for the purpose of blocking of funds, if the application value is Rs.5 lac or less. The intermediary shall upload the bid on the Stock Exchange bidding platform. The application amount would be blocked through the UPI mechanism in this case.

2.9.4. New entities / mechanisms part of the public issue process using UPI

a) National Payments Corporation of India (NPCI): NPCI, a Reserve Bank of India (RBI) initiative, is an umbrella organization for all retail payments in India. It has been set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks Association (IBA).

b) Unified Payments Interface (UPI): UPI is an instant payment system developed by the NPCI. It enables merging several banking features, seamless fund routing & merchant payments into one hood. UPI allows

c) Sponsor Bank: Sponsor Bank means a Banker to the Issue registered with SEBI which is appointed by the Issuer to act as a conduit between the Stock Exchanges and NPCI in order to push the mandate collect requests and / or payment instructions of the retail investors into the UPI.

2.9.5. Validation by Stock Exchanges and Depositories

The details of investor viz. PAN, DP ID / Client ID, entered on the Stock Exchange platform at the time of bidding, shall be validated by the Stock Exchange/s with the Depositories on real time basis. Stock Exchanges and Depositories shall put in place necessary infrastructure for this purpose.

2.9.6. Role of entities involved in the public issue process

a) Issuer

i. Issuer and the stock exchange shall enter into an arrangement which shall contain the inter se rights, duties, responsibilities and obligations of the issuer and stock exchange(s) and provide for a dispute resolution mechanism between the issuer and the stock exchange(s).

ii. Issuer shall maintain a single escrow account for collecting application money through all the methods. The Sponsor Bank appointed by the issuer may be the same bank with whom the public issue account has been opened.

iii. Issuer shall appoint one of the SCSBs as Sponsor Bank to act as conduit between the Stock exchanges and NPCI in order to push mandate, collect requests and / or payment instructions of the investors in the UPI.

b) Registrar

i. The registrar shall have an online or system driven interface with the Stock Exchange platform to get updated information/ data/ files pertaining to issue.

ii. The Registrar shall collect aggregate applications details from the stock exchanges platform to decide the eligible applications and process the allotment as per applicable SEBI Regulations.

iii. An application without valid application amount shall be treated as invalid application by the Registrar.

iv. The Registrar shall credit units to all valid allottees.

v. The Registrar shall ensure refund of application amount or excess application amount in the bank account of the applicant as stated in its demat account.]¹¹

c) [Stock Exchange

i. Stock Exchanges to provide transparent electronic bidding facility.

ii. Stock exchange(s) shall validate the electronic bid details with depository’s records for DP IDClient ID and PANby the end of each bidding day and bring the inconsistencies to the notice of SCSBs or intermediaries concerned, for rectification and re-submission within the time specified by stock exchange(s).

iii. Stock exchange(s) shall allow modification of selected fields viz. DP ID/Client ID or Pan ID (Either DP ID/Client ID or Pan ID caxn be modified but not BOTH), Bank code and Location code in the bid details already uploaded on a daily basis upto timeline as has been specified.

iv. The stock exchanges shall develop the systems to facilitate the investors to view the status of their public issue applications on their websites and sending the details of applications and allotments through SMS and E-mail alerts to the investors.]¹²

v. [The stock exchanges shall be responsible for accurate, timely and secured transmission of the electronic application file uploaded by all participants on the online platform, to the registrar.

vi. The stock exchanges shall be responsible for disseminating the issue information on Exchange web site on a periodic basis across all

vii. The stock exchanges shall update demand data on working days on their websites which shall include all the UPI (accepted/pending) and ASBA bids; ‘Working day’ for this purpose shall be the working day of the Stock
Exchange on which units of REIT are proposed to be listed.

d) Intermediaries

i. The Intermediaries shall be responsible for addressing any investor grievances arising from the applications uploaded by them in respect of quantity, price or any other data entry or other errors made by them.

ii. If the Intermediary has not entered any details correctly on the stock exchanges platform and it results on the mismatch with the data obtained by the Registrar from the depositories, the Intermediary shall be responsible for rejection of such applications.

iii. The intermediaries shall provide necessary guidance to their investors to use UPI mechanism for blocking funds while making applications in public issues.]¹³

iv. [Intermediaries accepting the application forms shall be responsible for uploading the bid along with other relevant details in application forms on the electronic bidding system of stock exchange(s) and submitting the form to SCSBs for blocking of funds (except in case of SCSBs, where blocking of funds will be done by respective SCSBs only).

v. All applications shall be stamped and thereby acknowledged by the intermediary at the time of receipt.]¹⁴

e) [Collecting Bank

The Collecting Bank shall be responsible for addressing any investor grievances arising from non-confirmation of funds to the Registrar despite successful realization of funds to the Registrar despite successful realization of the payment instrument in favor of the issuer’s Escrow Account, or any delay or operational lapse by the Collecting Bank in sending the forms to the Registrar.

2.9.7. Other requirements in public issue process

a) The additional text of data fields required to be included in the Application-and-bidding-form relating to UPI is placed at Part B of Annexure – 11.

b) The details of commission and processing fees payable to each intermediary and the timelines for payment shall be disclosed in the offer document.

2.9.8. The Merchant Banker shall ensure that the process of additional payment mechanism through UPI is disclosed in the offer document and in all the newspaper where issue advertisement is disclosed.]¹⁵[The blocking of funds accompanied with any revision of Bid, shall be adjusted against the amount blocked at the time of the original bid or the previously revised bid.]¹⁶

2.9.9. The merchant banker(s) shall ensure that adequate infrastructure is available with syndicate members for data entry of the bids in a timely manner.

2.9.10. The bidding terminals shall contain an online graphical display of demand and bid prices updated at periodic intervals, not exceeding thirty minutes.

2.9.11. The manager on behalf of the REIT may decide to close the bidding by institutional investors one day prior to the closure of the issue subject to the condition that bidding shall be kept open for a minimum of three days for all categories of applicants and suitable disclosures made in the draft offer document and offer document.

2.9.12. No investor shall either withdraw or lower the size of bids at any stage.

2.9.13. The identity of Institutional Investors except anchor investors making the bidding shall not be made public.

2.9.14. The stock exchanges shall continue to display on their website, the data pertaining to book built issues in a uniform format, inter alia giving category-wise details of bids received, for a period of atleast three days after closure of bids.

2.10. Allotment procedure and basis of allotment.

2.10.1. On receipt of the sum payable on application, the manager on behalf of the REIT shall allot the units to the applicants.

2.10.2. The allotment of units to applicants other than anchor investors shall be on proportionate basis within the specified investor categories and the number of units allotted shall be rounded off to the nearest integer, subject to minimum allotment as per REIT Regulations.

2.10.3. In case of under-subscription in any investor category, the unsubscribed portion in either of the category specified in clause 2.3.1 may be allotted to applicants in the other category.

2.10.4. The authorized representatives of the designated stock exchange along with the post issue merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalized in a fair and proper manner.

2.11 . Listing of units¹⁷

2.11.1. The Self Certified Syndicate Banks (SCSBs), stock exchanges, depositories, intermediaries shall co-ordinate to ensure completion of listing (through public issue) and commencement of trading of units of the REIT, within six working days from the date of closure of issue. The indicative timelines from issue closure till listing are as under.

Timelines from issue closure till listing of units

Sl. No.

Details of activities

Due date
(working day*)

Issue closes

T (Issue closing
date)

a) Stock exchange(s) shall allow modification of selected fields (till 11 AM) in the bid details already uploaded.

b) RTA to get the electronic bid details from the stock exchanges by end of the day.

c) Designated branches of Self Certified Syndicate Banks (SCSB) may not accept applications after T+1 day.

d) Syndicate members, brokers, DPs and RTAs to forward a schedule with following fields along with the application forms to designated branches of the respective SCSBs for blocking of funds.

S. No.	Details
1	Symbol
2	Intermediary code
3	Location code
4	Application No.
5	Category
6	PAN
7	DP Id
8	Client ID
9	No. of units
10	Amount

e) RTA to give bid file received from stock exchanges containing the application number and amount to all the SCSBs who may use this file for validation/ reconciliation at their end.

f) SCSBs to continue/begin blocking of funds.

g) Demat Account of REIT is credited with the shares of SPV.

T+1

a) Manager on behalf of REIT, merchant banker and RTA to submit relevant documents to the stock exchange(s) except listing application, allotment details and demat credit and refund details for the purpose of listing permission.

b) SCSBs to send confirmation of funds blocked (final certificate) to the RTA by end of the day.

c) RTA shall reconcile the compiled data received from the stock exchange(s) and all SCSBs.

d) RTA to undertake “Technical Rejection” test based on electronic bid details and prepare list of technical rejection cases.

e) Transfer of shares from Sponsor Demat a/c to Trust Demat account

T+2

a) Finalization of technical rejection and minutes of the meeting between manager on behalf of REIT, merchant banker, RTA.

b) The allotment in the public issue of units to applicants other than anchor investors and strategic investors shall be on proportionate basis.

c) RTA shall finalise the basis of allotment and submit it to the designated stock exchange for approval.

d) Designated stock exchange to approve the basis of allotment.

e) RTA to prepare funds transfer schedule based on approved basis of allotment.

f) RTA and merchant banker to issue funds transfer instructions to SCSBs.

g) Sponsor shall transfer its entire shareholding or interest or rights in the hold Co. and /or SPV or ownership of the real estate or property as disclosed in the offer document.

h) Manager on behalf of the REIT to initiate corporate action for credit of units of REIT to the sponsor/other shareholders of the SPVs/assets.

T+3

a) SCSBs to credit the funds in public issue account of the REIT and confirm the same.

b) After successful transfer of assets to REIT, the allotment of units to investors in the public issue shall be made.

c) RTA/ Manager to initiate corporate action for credit of units of REIT to successful allottees in the public issue.

d) Manager and RTA to file allotment details with designated stock exchange(s) and confirm all formalities are complete except demat credit.

e) RTA to send bank-wise data of allottees, amount due on units allotted, if any, and balance amount to be unblocked to SCSBs.

T+4

a) RTA to receive confirmation of demat credit from depositories.

b) Manager and RTA to file confirmation of demat credit and issuance of instructions to unblock ASBA funds, as applicable, with stock exchange(s).

c) The merchant banker(s) shall ensure that the allotment, credit of dematerialised units of REIT and unblocking of application monies, as may be applicable, are done electronically.

d) Manager on behalf of REIT shall make listing application to stock exchange(s) to give listing and trading permission.

e) Stock exchange(s) to issue notice for listing and commencement of trading.

T+5

Trading commences

T+6

* Working days will be all trading days of stock exchanges, excluding Sundays,

and

bank holidays

2.12. Maintenance of books and records

2.12.1. A final book of demand showing the result of the allocation process shall be maintained by the merchant banker(s).

2.12.2. The merchant banker(s) and other intermediaries associated in the book building process shall maintain records of the book building prices.

2.12.3. The Board shall have the right to inspect the records, books and documents relating to the book building process and such person shall extend full co-operation.

2.13. Post- issue reports.

2.13.1. The lead merchant banker shall submit the following post-issue reports to the Board:

a) initial post issue report as specified in Part A of Annexure – 2, within three working days of closure of the issue.

b) final post issue report as specified in Part B of Annexure – 2, within fifteen days of the date of finalization of basis of allotment or within fifteen days of refund of money in case of failure of issue.

2.1 3.2. The lead merchant banker shall submit a due diligence certificate along with the final post issue report as per Form D of Annexure – 1.

2.14. Public communications, publicity materials, advertisements and research reports.

2.14.1 . Any public communication including advertisement, publicity material, research reports, etc. concerned with the issue shall not contain any matter extraneous to the contents of the offer document.

Explanation: Public communication includes but not limited to corporate, project and issue advertisements of the REIT, interviews, blogs, social media posts by its sponsors, sponsor group, manager, trustee, directors of any of the parties to the REIT, duly authorized employees or representatives of the REIT/Manager, documentaries about the REIT or its sponsors, periodical reports, press releases, etc.

2.14.2. The Manager on behalf of the REIT shall make prompt, true and fair disclosure of all developments taking place between the date of filing offer document with the Board and the date of allotment of units which may have a material effect on the REIT, by issuing public notices on the website of the sponsor, manager and stock exchanges and in all the newspapers in which the pre issue advertisement was released and website of RE IT, if applicable.

2.14.3. In respect of all public communications, the Manager on behalf of the REIT shall obtain approval from the merchant bankers responsible for marketing the issue.

2.14.4. Any such public communication shall comply with the following:

a) it shall be truthful, fair and shall not be manipulative or deceptive or

b) it shall not contain any statement or promise which is untrue or misleading.

c) if it reproduces or purports to reproduce any information contained in an offer document, it shall reproduce such information in full and disclose all relevant facts and not be restricted to select extracts relating to that information.

d) it shall be set forth in a clear, concise and understandable language.

e) it shall not include any issue slogans or brand names for the issue except the normal commercial name of the sponsor/manager.

f) it shall not use extensive technical, legal terminology or complex language and excessive details which may distract the investor.

g) it shall not contain statements which promise or guarantee rapid increase in profits/yield/returns

h) it shall not display models, celebrities, fictional characters, landmarks or caricatures or the likes.

i) no issue advertisement shall appear in the form of crawlers (the advertisements which run simultaneously with the programme in a narrow strip at the bottom of the television screen) on television.

j) in any issue advertisement on television screen, the risk factors shall not be scrolled on the television screen and the advertisement shall advise the viewers to refer to the red herring prospectus or other offer document for details.

k) it shall not contain slogans, expletives or non-factual and unsubstantiated

l)if it contains highlights, it shall also contain risk factors with equal importance in all respects including print size of not less than point seven

2.14.5. No such public communication shall be issued giving any impression that the issue has been fully subscribed or oversubscribed during the period the issue is open for subscription.

2.14.6. No such public communication shall contain any offer of incentives, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise.

2.14.7. [The merchant bankers shall submit a compliance certificate in respect of news reports appearing for the period between the date of filing the draft offer document with the Board and the date of closure of the issue in accordance with the Clause 11of Schedule IX of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.]¹⁸

2.15. Other Obligations of Post-issue lead merchant banker

2.15.1. Obligations of the post-issue merchant banker(s) with respect to refund, allotment, payment of interest to applicants in case of delayed allotment/refund, etc. shall be as per the disclosure in the offer document.

2.15.2. The post-issue merchant banker(s) shall regularly monitor redressal of investor grievances relating to post-issue activities such as allotment, refund, etc.

2.15.3. The post-issue merchant banker(s) shall ensure that advertisement giving details relating to oversubscription, basis of allotment, number, value and percentage of all applications, number, value and percentage of successful allottees for all applications , date of completion of dispatch of refund orders or instructions to Self-Certified Syndicate Banks by the Registrar, date of dispatch of certificates and date of filing of listing application, etc. is released within ten days from the date of completion of the above activities on the website of the REIT, sponsor, manager, stock exchanges and in all the newspapers in which the pre issue advertisement was released, if applicable.

2.15.4. The post-issue merchant banker(s) shall ensure that REIT, advisors, brokers or any other entity connected with the issue do not publish any advertisement stating that issue has been oversubscribed or indicating investors’ response to the issue, during the period when the public issue is still open for subscription by the public.

2.15.5. The post-issue merchant banker(s) shall continue to be responsible for post-issue activities till the subscribers have received credit to their demat account or refund of application moneys and the listing agreement is entered into by the REIT with the stock exchange and listing/ trading permission is obtained.

2.1 6. General conditions:

2.16.1. Restrictions on issue: No REIT shall make a public issue of units, if the REIT or parties to the REIT or the promoter(s) or director(s) of parties to the RE IT:

a) is debarred from accessing the securities market by the Board;

b) is a promoter, director or person in control of any other company or a sponsor, manager or trustee of any other REIT or REIT which is debarred from accessing the capital market under any order or directions made by the Board;

c) is in the list of the wilful defaulters published by the Reserve Bank of India.

2.16.2. Alteration of rights of holders of units: No REIT shall alter the terms (including the terms of issue) of units which may adversely affect the interests of the holders of that units unless a resolution to that effect is passed at a meeting of the unitholders in accordance with Regulation 22(5) of REIT Regulations.

2.16.3. Prohibition on payment of incentives: No person connected with the issue, including a person connected with the distribution of the issue, shall offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application for allotment of units:

Provided that nothing contained in this regulation shall apply to fees or commission for services rendered in relation to the issue.

2.16.4. Appointment of Compliance Officer: The compliance officer designated by the manager under Regulation 10(26) of the REIT Regulations shall be responsible for monitoring the compliance of the securities laws and for redressal of investorsgrievances.

Explanation: For the purpose of this clause, the term “securities laws” shall mean SEBI Act, 1992, SCRA, 1956, Depositories Act, 1996 and rules and regulations made thereunder, general or special orders, guidelines or circulars made or issued thereunder.

2.16.5. General obligations of Merchant Bankers

a) The merchant bankers shall exercise due diligence and satisfy himself about all the aspects of the issue including the veracity and adequacy of disclosure in the offer documents.

b) The merchant bankers shall call upon the REIT, parties to the REIT or directors of the parties to the REIT or in case of an offer for sale, the selling unit holders, to fulfill their obligations as disclosed by them in the offer document and as required in terms of these guidelines.

c) The responsibility of the merchant bankers with respect to due diligence shall continue even after the completion of issue process.

d) The merchant bankers shall ensure that the information contained in the offer document and the particulars as per audited financial statements in the offer document are not more than six months old from the issue opening date.

e) The Manager on behalf of the REIT shall ensure that transactions in units by the sponsor, sponsor group and their associates during the period between the date of filing the offer document with the Board /designated stock exchange, as the case may be and the date of closure of the issue shall be reported to the recognised stock exchanges where the units of the REIT are listed or going to be listed, within twenty four hours of the transactions.

Chapter 3. Disclosure of financial information in offer document for REITs¹⁹

(A) Financial Information of REIT:

The financial information, to be disclosed in the offer document/placement memorandum, shall comply with the following:

3.1. Period of financial information to be disclosed:

3.1.1. The offer document shall contain financial information for a period of last three completed financial years immediately preceding the date of offer document.

3.1.2. If the closing date of the last completed financial year falls more than six months before the date of offer document, then the REIT shall also disclose interim financial information, in addition to the three year financial information referred in para 3.1.1 above.

The said interim financial information shall be not more than six months old from the date of offer document.

3.2. Nature of financial information

3.2.1. REIT shall disclose the financial information for the previous three financial years and the interim period, if any, in either of the following manner depending upon the history of the REIT:

a) If the REIT has been in existence for the last three completed financial years immediately preceding the date of offer document, then the historical financial statements of the REIT (on both standalone as well as consolidated basis) for last three years, and the interim period, if any, shall be disclosed.

b) If the REIT has been in existence for a period lesser than the last three completed financial years and the historical financial statements of REIT are not available for some portion or the entire portion of the reporting period of three years and interim period, then the combined financial statements need to be disclosed for the periods when such historical financial statements are not available.

The principles for preparation of combined financial statements are discussed in Section (G) below.

3.3. Content and basis of preparation of financial information:

3.3.1. The financial information shall be prepared in accordance with Indian Accounting Standards (Ind AS) and/or any addendum thereto as defined in Rule 2 (1) (a) of the Companies (Indian Accounting Standards) Rules, 2015.

3.3.2. The financial information presented by the REIT can be in the form of condensed financial statements. Such financial information shall comply with the minimum requirements for condensed financial statements as described in Ind AS 34 on ‘Interim Financial Reporting’to the extent applicable.

3.3.3. The financial information shall, inter-alia, disclose the following financial statements:

a) Balance Sheet;

b) Statement of Profit and Loss/Income and Expenditure;

c) Statement of Changes in Unit holders’ Equity;

d) Statement of Cash flows / Receipts and Payments;

e) Statement of Net Assets at Fair Value

f) Statement of Total Returns at Fair Value

g) Explanatory notes annexed to, or forming part of, any statements referred above

For the financial statements listed above, the minimum information to be disclosed is given in Section ‘(H)’ below.

3.3.4. The financial information shall be disclosed after making the following adjustments, wherever applicable and wherever quantification is possible:

a) Adjustments/rectifications for all erroneous accounting practices or failures to make provisions or other matters which resulted in modified opinion(s) or modification(s) to the opinion in the auditor’s report. Modified opinion(s), where quantification is not possible and which have not been adjusted, shall be highlighted along with the management If the impact of above adjustments/ rectifications is not considered ascertainable, then a statement to that effect shall be given by the auditors.

b) Material amounts relating to adjustments for prior period errors/items (as discussed in Ind AS 8 Accountng Policies, Changes in Accounting Estimates and Errors’) shall be identified and adjusted n arriving at the profits of the years to which they relate.

c) Where there has been a change in accounting policy, the profits or losses/incomes or expenditures of the earlier years (required to be disclosed in the offer document) and of the year in which the change in the accounting policy has taken place shall be recomputed to reflect what the profits or losses/incomes or expenditures of those years would have been if a uniform accounting policy was followed in each of these years.

d) If any accounting policy followed in past was not in compliance with applicable laws and/or accounting standards, the financial statements shall be adjusted and recomputed in accordance with correct accounting

e) The Balance Sheet shall be prepared after deducting the balance outstanding on Revaluation reserve account from both Fixed assets and Reserves and the Net worth should be arrived at after such deductions.

3.3.5. Financial statements shall disclose all ‘material’ itemsie , the items if they can, individually or collectively, influence the decisions made on the basis of the financial statements. Materiality shall be judged and determined by the Manager depending upon pertinent facts and circumstances, including the size or nature of the item or a combination of both.

In addition to the consideration of ‘materiality’ as specified above any term of income or expenditure, which exceeds one per cent of the revenue from operations or Rs.10 lacs, whichever is higher, shall be disclosed separately either on the face of financial statements or in the schedules/notes.

3.4. Additional financial disclosures

In addition to the financial statements referred in Paragraph 3.3 above, the following statements/disclosures shall also be included as a part of the audited financial information and shall also be subjected to audit:

3.4.1. Project wise operating cash flows:

The REIT shall disclose operating cash flow from the projects (project-wise) for all the REIT assets that are included in such financial information for the last three years and interim period, if any.

3.4.2. Earnings per Unit:

The REIT shall disclose Earnings per Unit (EPU) for the last three years and the interim period, if any. The principles for computation of EPU shall be same as the principles laid down in Ind AS 33 Earnings per Share, to the extent applicable. Relevant disclosures shall be provided as part of the notes for the EPU computation.

3.4.3. Contingent liabilities:

a) A statement of REIT’s Contingent liabilities, if any, as on the date of latest financial information disclosed in the offer document/placement memorandum, shall be disclosed.

b) If there are any material changes in the contingent liabilities from the aforementioned date of latest financial information to the date of the offer document, the details of such changes shall be disclosed in the offer document.

3.4.4. Commitments:

a) A statement of REIT’s Commitments if any as on the date of latest financial information disclosed in the offer document, shall be disclosed.

b) If there are any material changes in the commitments from the aforementioned date of latest financial information to the date of the offer document, the details of such changes shall be disclosed in the offer document.

3.4.5. Related party transactions:

a) For the related parties as defined in the REIT Regulations, the REIT shall provide relevant disclosures of all related party transactions in compliance with the requrements of “Ind AS 24 – Related Party Disclosures” and the REIT Regulations.

b) Further, the following additional disclosures related to Related parties and Related party transactions shall also be included:

i. Details of related party and its relationship with REIT;

ii. Nature of the transaction;

iii. Value of the transaction;

iv. In case of any related party transaction involving acquisition or disposal of a REIT asset, the following additional information shall be provided

• Summary of valuation report;

• Material conditions or obligations in relation to the transaction;

• Rate of interest, if external financing has been obtained for the transaction/acquisition; and

• Any fees or commissions received or to be received by any associate of the related party in relation to the transaction.

3. 4.6. Capitalisation statement

A REIT shall disclose a Capitalisation Statement showing total debt, net worth, and the debt/equity ratios before and after the completions of issue. An illustrative format of the Capitalisation Statement is specified hereunder:

Particulars	Pre-issue as at ….	As adjusted for issue
(Amount)
Total Debt	xx	xx
Unit holders’ Funds
Unit Capital	xx	xx
Xx	xx	xx
xx	xx	xx
Reserves	xx	xx

Provided that in case of any change in the Unit Capital (since the date from which the financial information has been disclosed in the Offer document), a note explaining the nature of the change shall be given.

3.4.7. Debt payment history

A statement including history of interest and principal payments of REIT shall be disclosed for past three years and interim period, if any, covering all REIT assets forming part of the historical financial information. Additionally, the following shall also be disclosed:

The carrying amount of debt at the beginning of each year
Additional borrowings during the year
Repayments during the year
Other adjustments / settlements during the year
The carrying amount of debt at the end of each year

3.5. Audit of Financial Information:

3.5.1 . The financial information shall be audited and the following shall be complied with respect to same:

a) The audit shall be carried out by the auditor appointed for the REIT as per the REIT regulations. The auditor, so appointed, shall be the one who has subjected itself to the peer review process of the Institute of Chartered Accountants of India (ICAI) and who holds a valid certificate issued by the Peer Review Board of ICAI.

b) In providing his report, the auditor shall be guided by the requirements of the ‘Guidance Note on Reports in Company Prospectuses’, issued by ICAI, to the extent applicable.

c) In particular, the reports of the auditors on the financial statements of the various REIT assets (whether prepared in accordance with the framework applicable to such REIT assets or the framework applicable to the RE IT) for the respective periods covered in the period of three years and the interim period, if any, will have to be taken into consideration and the same shall be relied upon by the auditor giving the final report.

For the audit procedures to be followed in such case, the auditor shall be guided by the procedures stated in the Standard on Auditing (SA) 600, “Using the Work of another Auditor”, to the extent appl cable. Further, the fact that the financial statements audited by other auditors have been relied upon shall be disclosed in the audit report.

d) As a part of the audit report, the auditor shall state whether:

i. he has obtained all information and explanations which, to the best of his knowledge and belief, were necessary for the purpose of his audit;

ii. the Balance Sheet and the Statement of Profit and loss/Income and Expenditure are in agreement with the books of account of the REIT; and

iii. the financial statements comply with the applicable accounting standards in his opinion.

e) As a part of the audit report, the auditor shall give his opinion as to whether:

i. the balance sheet gives a true and fair view of the state of affairs of the REIT as at the balance sheet dates;

ii. the statement of profit and loss/income and expenditure gives a true and fair view of the REIT’s p ofits or losses/incomes or expenditures for the years/periods ended at the balance sheet dates;

iii. the statement of cash flow /receipts and payments gives a true and fair view of the cash movements of the REIT for the years/periods ended at the balance sheet dates;

iv. the statement of changes in unit holders’ eq u ty gives a true and fair view of the movement of the unit holders funds for the years/periods ended at the balance sheet dates;

v. the statement of net assets at fair value gives a true and fair view of the net assets as at the balance sheet date; and

vi. the statement of total returns at fair value gives a true and fair view of the total returns for the years/periods ended at the balance sheet dates.

(B) Projections of REIT’s Revenues and Operating Cash flows

3.6. The offer document shall contain disclosures of the projections of income and operating cash flows of the REIT, project-wise, over the next three years including related assumptions.

3.7. The projections shall be disclosed for REIT assets/projects that are owned by the REIT or are proposed to be owned by REIT prior to the allotment of units in the public offer.

3.8. The following minimum items shall be disclosed as a part of the projections for the next three years:

Project-wise revenue (rental income and/or other operating income)
Project-wise operating cash flows
Assumptions for projections
Any other item deemed important for better readability and understanding

3.9. The aforesaid projections, including assumptions, shall be certified by the auditor. For the purpose of said certification, the auditor shall be guided by the requirements of SAE 3400 for ‘The Examination of Prospectve Financial information’ and any other relevant standards/directions issued by ICAI in this context.

3.10. Further, the aforesaid projections (including the underlying assumptions and calculations) shall also be certified by the Manager.

(C) Management Discussion and Analysis of REIT’s operations

3.11 . REIT shall prepare and disclose Management Discussion and Analysis (MDA) (by the Manager), based on the financial statements. A comparison shall be provided for the most recent financial information with financial information of previous two years.

3.12. MDA shall, inter-alia contain the following:

Overview of the business of the REIT
A summary of the financial information containing significant items of income and expenditure.
Factors that may affect results of the operations, key risks and mitigating factors
Quality of earnings and revenue streams
Significant developments subsequent to the last financial year:

• A statement by the Manager whether in their opinion there have arisen any circumstances since the date of the last financial statements as disclosed in the offer document and which materially and adversely affect or is likely to affect the business or profitability of the REIT, or the value of its assets, or its ability to pay its liabilities within the next twelve months.

Procedure for dealing with and approval of related party transactions
Related party transaction(s) involving acquisition or disposal of a REIT asset

• The analysis shall discuss impact of such acquisition/disposal on the yield of the units of REIT

An analysis of reasons for the changes in significant items of income and expenditure shall also be given, inter alia, containing the following:

• unusual or infrequent events or transaction;

• significant economic changes that materially affected or are likely to affect income from continuing operations;

• known trends or uncertainties that have had or are expected to have a material adverse impact on revenues from continuing operations;

• future changes in relationship between costs and revenues, in case of events such as future increase in operating costs that will cause a material change are known;

• total turnover from each major segments of the REIT

• status of any publicly announced new business segment;

• the extent to which business is seasonal;

• any significant dependence on a single or few assets, clients, suppliers ;

• competitive conditions.

(D) Other Disclosures for REIT

3.1 3. Working Capital

A statement from Manager regarding sufficiency of the working capital to fulfill the present requirements of REIT (i.e., at least twelve months from date of listing) shall be disclosed. In case, sufficient working capital is not available in the opinion of Manager, then a statement should be provided describing how it proposes to provide additional working capital requirement.

3.14. Past Market Performance

In case of a capital offering subsequent to the initial offer, the market value of the units traded on all the designated stock exchanges where REIT is listed shall be disclosed:

on the last date of reporting period
highest value during reporting period based on intra-day and on closing price with specified date
lowest value during reporting period intra-day and on closing price with specified date

(E) Historical Financial information of Manager and Sponsor(s)

3.15. An offer document of REIT shall include summary of the audited consolidated financial statements (including the Balance Sheet and Statement of Profit and Loss (without schedules)) of Manager and Sponsor(s) for past three completed years, prepared in accordance with accounting standards, as applicable, as per the Companies Act, 2013 and rules thereunder.

For example, if the concerned entity is required to follow Companies (Accounting Standards) Rules, 2006 during the entire period of last three years, then the three year financial information of such entity shall be prepared in accordance with Companies (Accounting Standards) Rules, 2006. Similarly, if the concerned entity is required to follow Companies (Indian Accounting Standards) Rules, 2015 during the entire period of last three years, then the three year financial information shall be prepared in accordance with Companies (Indian Accounting Standards) Rules, 2015.

3.16. In case the Manager and/or Sponsor(s) has/have done a transition from Companies (Accounting Standards) Rules, 2006 to Companies (Indian Accounting Standards) Rules, 2015 at any time during the period of last three years, then the financial information for the last three years shall be disclosed on the following basis:

a) If the concerned entity is following or is required to follow Companies (Indian Accounting Standards) Rules, 2015 for the latest two years (for the latest three years including comparatives of the first year of adoption) out of last three completed years, then the financial information for all the three years shall be prepared as per Companies (Indian Accounting Standards) Rules, 2015.

b) If the concerned entity is following or is required to follow Companies (Indian Accounting Standards) Rules, 2015 only for the latest year (for the latest two years including comparatives) out of the historical period of three years, then the financial information for the recent two years shall be disclosed as per the Companies (Indian Accounting Standards) Rules, 2015 and the financial information for the earliest year (i.e. the third last year) shall be disclosed as per the Companies (Accounting Standards) Rules, 2006.

For example, if financial information of Manager/Sponsor is presented for the financial years 2014-15, 2015-1 6, and 2016-17 and such Manager/Sponsor is required by Companies Act, 2013 to report under Ind AS from financial year 2016- 17 (with financial year 2015-1 6 as comparatives), then it shall disclose financial information for financial years 2016-17 and 2015-16 as per Companies (Indian Accounting Standards) Rules, 2015 and financial year 2014-15 as per Companies (Accounting Standards) Rules, 2006.

Further, for example, if financial information of Manager/Sponsor is presented for the financial years 2014-15, 2015-1 6, and 2016-17 and such Manager/Sponsor is required by Companies Act, 2013 to report under Ind AS from financial year 2015-16 (with financial year 2014-15 as comparatives), then it shall disclose financial information for all the three financial years, i.e. 2014-15, 2015-16 and 2016-17, as per Companies (Indian Accounting Standards) Rules.

3.17. Further, if any of the Manager/Sponsor is a foreign entity and is not legally required to comply with the Companies Act, 2013, then the financial statements of such entity may be prepared in accordance with International Financial Reporting Standards (IFRS).

(F) Framework for calculation of Net Distributable Cash Flows (NDCFs):

3.1 8. Every REIT/ Manager shall define net distributable cash flows (NDCFs) for itself and the definition as decided by REIT/Manager shall be:

a) subject to compliance with Companies Act, 2013 or Limited Liability Partnership Act, 2008, or any Central Government Act, as applicable; and

b) disclosed in offer document and shall be followed consistently pursuant to

3.19. The indicated framework shall be followed in so far as whatever is applicable to the Holdco/SPV/RE IT.

3.20. REIT may take guidance from the following framework for defining and calculating NDCFs at the Holdco/SPV level and at the REIT level:

(I.) Calculation of Net Distributable Cash Flows at the SPV level:

Description	Amount
Profit after tax as per Statement of profit and loss/income and expenditure (standalone) (A)	xx
Add: Depreciation and amortisation as per Statement of profit and loss/income and expenditure	xx
Add/less: Loss/gain on sale of Real estate assets	xx
Add: Proceeds from sale of Real estate assets adjusted for the following: related debts settled or due to be settled from sale proceeds directly attributable transaction costs proceeds reinvested or planned to be reinvested as per para 18 (7) (a) of the REIT Regulations	xx
Add: Proceeds from sale of Real estate assets not distributed pursuant to an earlier plan to re-invest, if such proceeds are not intended to be invested subsequently	xx
Add/less: Any other item of non-cash expense / non cash income (net of actual cash flows for these items), if deemed necessary by the Manager. For example, any decrease/increase in carrying amount of an asset or of a liability recognised in Statement of profit and loss/income and expenditure on measurement of the asset or the liability at fair value, interest cost as per effective interest rate method, deferred tax, lease rents recognised on a straight line basis, etc.	xx
Less: Repayment of external debt (principal) / redeemable preference shares / debentures, etc., if deemed necessary by the Manager	xx
Total Adjustments (B)	xx
Net Distributable Cash Flows (C)=(A+B)	xx

(II.) Calculation of Net Distributable Cash Flows at the Consolidated REIT level:

Description	Amount
Profit after tax as per Statement of profit and loss/income and expenditure (consolidated) (A)	xx
Add: Depreciation and amortisation as per Statement of profit and loss/income and expenditure (consolidated)	xx
Add/less: Loss/gain recognised on sale of Real estate assets or equity shares or interest in Holdco/SPV	xx
Add: Proceeds from sale of Real estate assets or equity shares or interest in Holdco/SPV adjusted for the following:· related debts settled or due to be settled from sale proceeds· directly attributable transaction costs· proceeds reinvested or planned to be reinvested as per para 18 (7) (a) of the REIT Regulations	xx
Add: Proceeds from sale of Real estate assets or equity shares or interest in Holdco/SPV not distributed pursuant to an earlier plan to re-invest, if such proceeds are not intended to be invested subsequently	xx
Add/less: Any other item of non-cash expense / non cash income (net of actual cash flows for these items), if deemed necessary by the Manager. For example, any decrease/increase in carrying amount of an asset or of a liability recognised in Statement of profit and loss/income and expenditure on measurement of the asset or the liability at fair value, interest cost as per effective interest rate method, deferred tax, lease rents recognised on a straight line basis, etc.	xx
Less: Repayment of external debt (principal) / redeemable preference shares / debentures, etc., if deemed necessary by the Manager	xx
Total Adjustments (B)	xx
Net Distributable Cash Flows (C) = (A+B)	xx

(G) Principles for preparation of combined financial statements:

3.21. For preparation of Combined Financial Statements, as has been indicated in paragraph 3.2.1 b) XFd1r U1 6i^pF ‘(L)’QLI ^pL1_$LREIT shall follow the following principles:

3.21 .1. Period for which combined financial statements shall be disclosed

When the REIT has not been in existence for some portion or the entire portion of the reporting period of three years and interim period, if any, then the financial information must be provided through combined financial statements, showing the combined financial performance of all the proposed REIT assets, for such period when REIT was not in existence.

3.21 .2. Assets/entities forming part of Combined Financial Statements:

All the assets or entities, which are proposed to be owned by the REIT, as per the disclosures in the offer document, shall collectively form part of combined financial statements.

3.21.3. Underlying assumption for preparation of Combined Financial Statements Such combined financial statements shall be prepared based on an assumption that all the assets and/or entities, proposed to be owned by REIT, were part of a single group for such period when REIT was not in existence.

3.21 .4. Preparation of Combined Financial Statements:

i. These statements shall be prepared on a combined basis and presented as if REIT assets were a part of a single group since the first day of the reporting period for which information is being

ii. The principles for preparation of combined financial statements shall be same as the princ ples la d down in “Ind AS 110 Consolidated Financial Statements” to the extent apicable. However, unlike consolidated financial statements, the combined financial statements shall not have the parent.

iii. While preparing Combined Financial Statements, transactions between the entities proposed to be owned by REIT (i.e. transactions between the entities which are forming part of the combined financial statements) shall be eliminated.

Further, all pertinent matters, such as non-controlling interests, foreign operations, different fiscal periods, or income taxes, etc. shall be treated in the same manner as in consolidated financial statements, to the extent applicable.

iv. In cases where one or more of the underlying REIT assets have been held by the sponsor or its associates or its group entities for a period lesser than the last three completed financial years, then such assets may be reflected in the Combined Financial Statements only from the date of holding by such entity. However, if the discrete financial information for such assets is also available for the pre-holding period (i.e. the period before the acquisition by the sponsor or its associates or its group entities), then such assets shall be reflected in the Combined Financial Statements for such pre-holding period as well.

v. If there are any assets for which the financial information is considered for a period lesser than three years and the additional interim period, if any, then such fact shall be clearly disclosed in the offer document, along with all pertinent details.

vi. Assumptions made in preparation of the Combined Financial Statements shall be disclosed in ‘Basis of Preparation of such

vii. The basis of preparation shall also explain the principles of combination and elimination of transactions amongst entities that are included in the Combined Financial Statements.

3.22. In addition to the principles listed at paragraph 3.21 above, the REIT/Manager, while preparing the Combined Financial Statements of the REIT, shall also be guided by the requirements laid down in the Guidance Note on Combined and Carve-Out Financial Statements’ and any other pertinent guidance/directions issued by ICAin this context.

(H) Minimum Disclosures for key financial statements:

3.23. For the financial statements listed at Paragraph 3.3.3 of Section (A)’ above, the lne items shall, at minimum, include the following:

3.23.1. Line items for Balance Sheet:

a) Assets

i. Property, plant and equipment;

ii. Capital work-in-progress

iii. Investment property;

iv. Intangible assets;

v. Inventories;

vi. ther receivables;

vii. Other financial assets (excluding Inventories & Other Receivables)

viii. Cash and cash equivalents;

ix. Deferred tax assets;

x. Assets for current tax.

b) Equity and Liabilities

i. Unit capital;

ii. Other payables;

iii. Provisions;

iv) Financial liabilities (excluding amounts shown under (b) and (c)), separately disclosing liabilities owed to sponsors;

v. Liabilities for current tax;

vi. Deferred tax liabilities;

vii. Other liabilities

3.23.2. Line items for Statement of Profit and loss/Income and Expenditure

a) Incomes and gains:

i. Revenue from operations;

ii. Dividend;

iii. Interest;

iv. Profit on sale of assets/investments

v. Other income (Clearly indicate nature of such income)

b) Expenses and losses:

i. Valuation expenses;

ii. Audit fees;

iii. Insurance & security expenses;

iv. Employee Benefits Expenses

v. Investment management fees (including fees paid to Manager)

vi. Trustee Fee

vii. Depreciation on property, plant and equipment;

viii. Amortization of intangible assets;

ix. Finance Cost (Interest);

x. Custodian fees;

xi. Registration fees;

xii. Repairs and maintenance in case of real estate asset;

xiii. Loss on sale of assets/investments

xiv. Other expenses (Clearly indicate nature of such expense)

c) Profit or loss for the period before income tax

d) Tax expense (current tax and deferred tax)

e) Profit or loss for the period after income tax

f) Items of other comprehensive income

g) Additional line items (if applicable)

i. Items that will not be reclassified to profit or loss

ii. Income tax relating to items that will not be reclassified to profit or loss

iii. Items that will be reclassified to profit or loss

iv. Income tax relating to items that will be reclassified to profit or loss

h) Total comprehensive income for the period (e+f) (Comprising profit (loss) and Other comprehensive income for the period)

3.23.3. Line items for the “Statement of changes in Unit holders’ equity”

a) Total comprehensive income for the period;

b) For each component of unit holders’ equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately (as a minimum) disclosing changes resulting from:

i. Profit or loss;

ii. Other comprehensive income;

iii. Aggregate amount of investments by unit holders in REIT, and dividends / other distributions by REIT to unit holders

3.23.4. Line items for the “Statement of Cash flow / Receipts and Payments”

Statement of Cash flow / Receipts and Payments, shall be prepared in accordance with the requirements of Ind AS 7-“Statement of Cash

Flows”.

3.23.5. Line items for Statement of Net Assets at Fa r Value’

The line items for the Statement of Net Assets at Fair Value, shall, at minimum, include the following:

S.No.	Particulars	Book Value	Fair Value
A.	Assets	xxxx	xxxx
B.	Liabilities	xxxx (as reflected in the balance sheet)
C.	Net Assets (A-B)	xxxx	xxxx
D.	No. of Units	xxxx	xxxx
E.	NAV (C/D)	xxxx	xxxx

Notes:

(i) Statement of Net Assets at Fair Value’ shall be provided only as on the last date of the financial information disclosed in the offer document.

(ii) Further, the breakup of the fair values of the assets shall be given property-wise in the notes to the Statement of Net Assets at Fair Value.

3.23.6. Line items for Statement of Total Return at Fair Value’:

The line items for the Statement of Total Return at Fair Value, shall, at minimum, include the following:

Particulars	Amount
Total Comprehensive Income (As per the Statement of Profit and loss/Income and Expenditure)	xxxx
Add/Less: Other Changes in Fair Value (e.g., in investment property, property, plant & equipment (if cost	xxxx
Total Return	xxxx

Note ‘Statement of Total Returns at Fair Value’ shall be provided only for the last completed year and interim period, if any.

3.24. Headings, line items, sub-line items and sub-totals may be presented as an addition or substitution on the face of the financial statements when such presentation is relevant to an understanding of a REIT’s fnancial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the REIT regulations or Indian Accounting Standards or any other law.

Chapter 4. Continuous Disclosures and Compliances by REITs20

Disclosure of Financial information to Stock Exchanges

(A) Financial Information of REIT:

While disclosing its financial information to the Stock Exchanges, a REIT shall comply with the following:

4.1. Frequency and Time period for disclosures:

4.1.1. A REIT shall submit its half yearly and annual financial information to the Stock Exchanges.

4.1.2. The financial information shall be submitted to the Stock Exchanges within the following time period:

a. The financial information of the first half year period of the financial year, shall be submitted within 45 days from the end of the half year.

b. The annual financial information shall be submitted within 60 days from the end of the financial year.

c. The financial information of the second half year period of the financial year, shall be submitted along with the annual financial information. The said information shall be submitted with a note stating that the figures of the second half year period are the balancing figures of the figures of the full financial year reduced by the figures of the first half year period.

4.2. Nature of financial information

4.2.1. The financial information shall be disclosed on both standalone as well as consolidated basis.

4.3. Comparative information

4.3.1. The annual financial information shall contain comparative information for the immediately preceding financial year.

The half yearly financial information shall contain comparative information for the immediately preceding half year as well as for the corresponding half year in the immediately preceding financial year.

4.3.2. The comparative information would consist of corresponding amounts (comparative figures) for all the items shown in the key financial statements (as specified in Paragraph 4.5 below), including notes, and for the additional disclosures (as specified in Paragraph 4.6 below), to the extent applicable.

4.3.3. In cases where the REIT was not in existence in the previous corresponding reporting period(s) mentioned at Paragraph 4.3.1 above, then the comparative information may not be provided and the said fact shall be clearly disclosed.

4.4. Basis of preparation of financial information

4.4.1. The financial information shall be prepared on the basis of accrual accounting policy and shall be in accordance with uniform accounting practices adopted for all the periods.

4.4.2. The financial information shall be prepared in accordance with Indian Accounting Standards (Ind AS) and/or any addendum thereto as defined in Rule 2 (1) (a) of the Companies (Indian Accounting Standards) Rules, 2015.

For HoldCos / SPVs owned by REIT, these entities may prepare financial statements in accordance with accounting standards and laws applicable to them. However, for consolidation purposes, consolidated financial information of REIT in accordance with Ind AS should be disclosed.

4.4.3. In addition to the financial information in accordance with Ind AS as mentioned at Paragraph 4.4.2 above, the REIT may, if it so desires, also submit the financial information as per the International Financial Reporting Standards (‘IFRS’). In such case, the material differences, if any, between the financial information as per Ind AS and as per IFRS, shall be appropriately highlighted and explained.

4.5. Key Financial Statements:

4.5.1. The financial information presented by the REIT can be in the form of condensed financial statements. Such financial information shall comply with the minimum requirements for condensed financial statements as described in Ind AS 34 on ‘Interim Financial Reporting’, to the extent applicable.

4.5.2. The annual financial information shall include the following financial statements:

a) Balance Sheet;

b) Statement of Profit and Loss/Income and Expenditure;

c) Statement of Changes in Unit holders’ Equity;

d) Statement of Cash Flows / Receipts and Payments;

e) Statement of Net Assets at Fair Value;

f) Statement of Total Returns at Fair Value;

g) Explanatory notes annexed to, or forming part of, any statements referred above

4.5.3. The half yearly financial information shall include the following financial statements

a) Statement of Profit and Loss/Income and Expenditure;

b) Explanatory notes annexed to, or forming part of, any statements referred above.

4.5.4. For the key financial statements listed above, the minimum information to be disclosed shall be as specified in paragraphs 3.23 and 3.24 of Chapter 3 of this master circular

4.5.5. Financial statements shall disclose all ‘material’ items, i.e., the items if they can, individually or collectively, influence the economic decisions made on the basis of the financial statements.

For determining materiality, the REIT shall be guided by paragraph 3.3.5 of Chapter 3 of this master circular

4.5.6. In cases of any sale/divestment of any holding(s)/investment(s) in underlying SPV(s)/HoldCo(s) or any sale of any real estate asset(s) by the REIT, the profit/loss on such transactions should be shown on a gross basis.

4.6. Additional disclosures while submission of financial information

In addition to the key financial statements referred in Paragraph 4.5 above, the following disclosures shall also be included as a part of both the half yearly as well as the annual financial information unless otherwise specified. Further, the below mentioned disclosures shall also be subjected to audit/limited review if applicable:

4.6.1. Statement of Net Distributable Cash Flows (NDCFs):

A REIT shall disclose statements of NDCFs of the REIT as well as of all the underlying HoldCos and SPVs. Such statements shall be prepared in accordance with, the definition of NDCFs and the framework for calculation of NDCFs, as defined by the REIT/Manager and as disclosed in the offer document.

4.6.2. Manager Fees:

a) A REIT shall disclose details of fees paid to the manager. Further, explanations and justification for the fees paid to the manager, including details about methodology for computation of the fees shall also be provided.

b) A REIT shall further confirm whether there has been any material change (materiality to be judged and determined by trustees in light of various pertinent factors including but not restricted to the size of REIT, amount of change, prevailing circumstances, etc.) in the fees paid to the manager compared to the previous reporting period. If yes, detailed reasons and information shall be provided thereof.

4.6.3. Changes in Accounting policies:

In cases of changes in accounting policies, if any, REIT shall make adequate disclosures required as per the applicable accounting laws (including Ind AS 8 issued by the ICAI).

4.6.4. Disclosures related to Modified Opinion(s)

The below mentioned disclosures would be required only in case of annual financial information of the REIT:

a) If the auditor has expressed any modified opinion(s) in respect of the audited annual financial information of the REIT, then the REIT, while submitting such financial information to the Stock Exchange(s), shall file a “Statement on Impact of Audit Qualifications” disclosing such modified opinion(s) and the cumulative impact of the same in the format as specified in Annexure I to the SEBI Circular No. CIR/CFD/CMD/56/2016 dated May 27, 2016. With respect to the format referred in the aforementioned Circular, the reference to “Earnings per Share’ and ‘Management’ should be construed as a reference to ‘Earnings per Unit’ and ‘Board of Directors/Governing Body of the Manager’ respectively.

Further, the aforementioned statement on impact of audit qualifications shall be signed by the following:

Chairperson/CEO/MD of the Manager
CFO or the Head of the Finance of the Manager
Statutory Auditor

b) If the auditor had expressed any modified opinion(s) or other reservation(s) in his audit report or limited review report in respect of the financial results of the immediately preceding financial year or half year, which had an impact on the profit or loss of that period, then the REIT shall disclose the following:

Brief details of the past modified opinion modified opinion(s) or other reservation(s)
Whether such modified opinion(s) or other reservation(s) have been resolved

o If yes, details thereof

o If no, the reasons thereof and the steps which the REIT intends to take in the matter

4.6.5. Other Statements:

a) The REIT shall also disclose the following statements:

Statement of Earnings per Unit:
Statement of Contingent liabilities:
Statement of Commitments:
Statement of Related party transactions

b) The details and the basis of disclosures for the above statements shall be same as specified in Paragraph 3.4 of Chapter 3 of this master circular.

4.7. Approval and authentication of financial information:

Before submission of the financial information to the Stock Exchanges, the financial information shall be approved by the Board of Directors/Governing Body of the Manager and shall be authenticated and signed in the following manner:

4.7.1. The financial information shall be signed by two designated personnel of the Manager certifying that the financial information do not contain any false or misleading statement or figures and do not omit any material fact which makes the statements or the figures contained therein misleading.

4.7.2. Subsequent to the above, the financial information shall be signed by the Chairperson or the Managing director/partner or the Whole time director/partner on the Board of Directors/Governing Body of the Manager and in the absence of all of them; it shall be signed by any other director/partner of the Manager who is duly authorized by the Board of Directors/Governing Body to sign the financial information.

4.8. Audit of Financial Information:

4.8.1. The annual financial information shall be audited, whereas the half yearly financial information may be either audited or unaudited. In case the REIT opts to submit unaudited financial information, the same shall be subject to limited review by the auditor of REIT.

4.8.2. The audit/limited review shall be carried out by the auditor appointed for the REIT as per the REIT Regulations.

The auditor, so appointed, shall be the one who has subjected itself to the peer review process of the Institute of Chartered Accountants of India (‘ICAI’) and who holds a valid certificate issued by the Peer Review Board of ICAI.

4.8.3. In case the financial information is audited, it shall comply with all the requirements specified in paragraph 3.5 of Chapter 3 of this master circular, to the extent applicable, and the audit report shall contain disclosures stated therein. In addition to the auditor’s opinion on the matters specified in paragraph 3.5.1 e) of Chapter 3 of this master circular, the auditor shall also give his opinion on the following:

a) whether the statement of NDCFs gives a true and fair view of NDCFs for the years/periods ended at the balance sheet dates

4.8.4. The financial information submitted to the Stock Exchanges shall be accompanied with Audit Report or Limited Review Report, as the case may be.

(B) Financial information of Manager

4.9. Along with the annual financial information of REIT, a REIT shall disclose summary of the audited consolidated financial statements (including the Balance Sheet and Statement of Profit and Loss (without schedules)) of Manager for the latest financial year, along with comparative figures for the immediate preceding financial year, prepared in accordance with the accounting standards and laws, as applicable for the Manager.

4.10. The above information may not be disclosed if the Manager’s Net worth is not materially eroded (Material erosion shall be judged by the Trustees in light of various pertinent factors including but not restricted to size of REIT, size of Manager, amount of Net worth erosion, prevailing circumstances, etc.) when compared to its Net worth as per its last disclosed financial statements by the REIT.

If the financial information of Manager is not disclosed because of the fact that there is no material erosion in the net worth as compared to the net worth as per the last disclosed financial statements, the said fact shall be clearly disclosed.

(C) Obligation to maintain proper books of account and records, documents etc.

4.11. Every REIT shall maintain proper books of account, records and documents etc. relating to a period of not less than eight financial years immediately preceding a financial year, or where the REIT had been in existence for a period of less than eight years, in respect of all the preceding years.

Other Continuous Disclosures to Stock Exchanges and Other Compliances

4.12. Listing Agreement:

4.12.1. REIT shall enter into a simplified listing agreement, with all the Stock Exchanges where it proposes to list its units, in lines with the format as specified under the SEBI Circular No. CIR/CFD/CMD/6/2015 dated October 13, 2015 on ‘Format of uniform Listing Agreement’.

4.12.2. However, with respect to the compliance with the listing conditions, REIT shall follow the REIT regulations and circulars issued therein.

4.13. Disclosure of Unit holding pattern:

4.13.1. A REIT shall disclose its Unit holding pattern for each class of unit holders, as applicable, within the following time periods, as applicable:

One day prior to listing of units on the stock exchanges;
On quarterly basis, within 21 days from the end of each quarter; and
Within 10 days of any capital restructuring of REIT resulting in a change exceeding 2% of the total outstanding units of REIT.

4.13.2. The Unit holding pattern shall be disclosed in the following format:

Category	Category of Unit holder	No. of Units Held	As a % of Total Outstanding Units	No. of units mandatorily held²¹		Number of units pledged or otherwise encumbered²¹
Category	Category of Unit holder	No. of Units Held	As a % of Total Outstanding Units	No. of units	As a % of total units held	No. of units	As a % of total units held
(A)	Sponsor(s) / Manager / and their associates/r elated parties and Sponsor Group
(1)	Indian
(a)	Individuals / HUF
(b)	Central/State Govt.
(c)	Financial Institutions/B anks
(d)	Any Other (specify)
	Sub- Total (A) (1)
(2)	Foreign
(a)	Individuals (Non Resident Indians / Foreign Individuals)
(b)	Foreign government
(c)	Institutions
(d)	Foreign Portfolio Investors
(e)	Any Other (specify)
	Sub- Total (A) (2)
	Total unit holding of Sponsor & Sponsor Group (A) = (A)(1) +(A)(2)
(B)	Public Holding
(1)	Institutions
(a)	Mutual Funds
(b)	Financial Institutions/ Banks
(c)	Central/Stat e Govt.
(d)	Venture Capital Funds
(e)	Insurance Companies
(f)	Provident/p ension funds
(g)	Foreign Portfolio Investors
(h)	Foreign Venture Capital investors
(i)	Any Other (specify)
	Sub- Total (B) (1)
(2)	Non-Institutions
(a)	Central Government/State Governments(s)/President of India
(b)	Individuals
(c)	NBFCs registered with RBI
(d)	Any Other (specify)
	Sub- Total (B) (2)
	Total Public Unit holding (B) = (B)(1)+(B)(2)
	Total Units Outstanding (C) = (A) + (B)

4.14. Review of Credit Rating:

4.14.1. Every credit rating, wherever required to be obtained by a REIT as per Regulation 20 (2) of the REIT Regulations, shall be reviewed once a year, by the registered credit rating agency.

4.14.2. The credit rating review shall be completed annually within 30 days from the end of the financial year. Further, immediately upon completion of the credit rating review exercise and upon the receipt of the credit rating report, an intimation along with all pertinent information should be made to the Stock Exchanges.

4.15. Website of REIT:

4.15.1. A REIT shall maintain a functional website wherein the contents of the said website should be updated up to last 2 days and the website which should contain all the relevant information about REIT, inter-alia, including the following:

Details of its business;
Financial information including complete copy of the Annual Report including Balance Sheet, Profit and Loss Account, etc.;
Contact information of the designated officials of the company who are responsible for assisting and handling investor grievances;
Email ID for grievance redressal and other relevant details;
Information, report, notices, call letters, circulars, proceedings, etc. concerning units;
All information and reports including compliance reports filed by REIT with respect to units; and
All intimations and announcements made by REIT to the stock exchanges – Any other information which may be relevant for the investors

4.15.2. Further, the contents of the website should be updated within 2 days of any changes / developments which trigger a need for an update on the website.

4.16. Grievance Redressal Mechanism:

4.16.1. REIT shall ensure that adequate steps are taken for expeditious redressal of investor complaints.

4.16.2. REIT shall ensure that it is registered on the SCORES platform or such other electronic platform or system of the Board as shall be mandated from time to time, in order to handle investor complaints electronically in the manner specified by the Board.

4.16.3. [All complaints including SCORES complaints received by the REIT shall be disclosed in the format mentioned in Annexure – 4 on the website of the REIT and also filed with the recognized stock exchange(s), where its units are listed within 21 days from the end of financial year or end of quarter, as the case may be.]22

4.16.4. The Trustee and the Board of Directors/Governing Body of the Manager, shall review the aforementioned statement, before submission of the same to the Stock Exchange(s), and shall ensure that all investor complaints are redressed by the Manager in timely manner.

4.17. Statement of deviation(s) or variation(s)

4.17.1. The REIT shall submit to the recognized stock exchange(s), where its units are listed, the following statement(s) on a quarterly basis for any public issue, rights issue, preferential issue, etc.:

a) Statement indicating deviations, if any, in the use of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable;

b) Statement indicating category wise variation, if any, between projected utilization of funds made by it in its offer document or explanatory statement to the notice for the general meeting, as applicable and the actual utilization of funds.

4.17.2. The statement(s) specified above, shall be continued to be given till such time the issue proceeds have been fully utilised or the purpose for which these proceeds were raised has been achieved.

Such statement(s) shall also be placed before the Trustee and the Board of Directors/Governing Body of the Manager for review. Pursuant to such review, the statement shall be submitted to the stock exchange(s). Such submission to the Stock Exchange(s) shall be made within twenty-one days from the end of each quarter

4.17.3. REIT shall furnish an explanation for the aforementioned variation in its Annual report.

REIT shall prepare an annual statement of funds utilized for purposes other than those stated in the offer document or explanatory statement to the notice for the general meeting, certified by the statutory auditors of the REIT, and place it before the before the Trustee and the Board of Directors/Governing Body of the Manager till such time the money raised through the issue has been fully utilized.

4.18. Additional disclosure requirements for REITs which have issued and listed debt securities23

4.18.1. REITs which have issued debt securities shall be required to comply with following continuous disclosure requirements:

a) Regulations 50, 51, 54, 55, 56, 57, 58, 59, 60, 61 and 61A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) and any other provisions of the aforesaid regulations as may be applicable to REITs.

b) Additional line items that shall be disclosed by REITs which have issued/listed their debt securities are as follows:

i. Asset cover available;

ii. debt-equity ratio;

iii. debt service coverage ratio;

iv. interest service coverage ratio;

v. net worth;

c) Modified opinion(s) in audit reports having a bearing on the interest payment or redemption or principal repayment capacity of the REITs shall be appropriately and adequately addressed by the board of the manager while publishing the accounts for the said period.

d) REITs shall submit to the stock exchange on a half yearly basis along with the half yearly financial results, a statement indicating material deviations, if any, in the use of proceeds of issue of debt securities from the objects stated in the offer document.

Chapter 5. Participation by Strategic Investor(s) in REITs24

5.1. The operational modalities, for the participation by the strategic investors in REITs shall be as under:

5.1.1. A REIT, if chooses to invite subscriptions from the strategic investors shall undertake the same in the following manner:

a) The strategic investor(s) shall, either jointly or severally, invest not less than 5% and not more than 25% of the total offer size.

b) The manager on behalf of the REIT, shall enter into a binding unit subscription agreement with the strategic investor(s), which propose(s) to invest in the public issue of REIT.

c) Subscription price per unit, payable by the strategic investor(s) shall be set out in the unit subscription agreement and the entire subscription price shall be deposited in a special escrow account prior to opening of the public issue.

d) The price at which the strategic investor(s) has/have agreed to buy units of the REIT shall not be less than the issue price determined in the public issue. Thus, if the price determined in the public issue is higher than the price at which the allocation is to be made to strategic investor(s), the strategic investor(s) shall bring in the additional amount within two working days of the determination of price in the public issue. However, if the price determined in the public issue is lower than the price at which the allocation is to be made to strategic investor, the excess amount shall not be refunded to the strategic investor and the strategic investor shall take allotment at the price at which allocation was agreed to be made to it in unit subscription agreement.

e) The draft offer document or offer document, as applicable, shall disclose details of the unit subscription agreement. Such details shall include name of each strategic investor, the number of units proposed to be subscribed by it or the investment amount, proposed subscription price per unit, etc.

f) The unit subscription agreement shall not be terminated except in the event the issue fails to collect minimum subscription.

5.1.2. The units subscribed by strategic investors, pursuant to the unit subscription agreement, will be locked-in for a period of 180 days from the date of listing in the public issue.

Chapter 6. Guidelines for issuance of debt securities by REITs25

6.1. For issuance of debt securities, REITs shall follow provisions of SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) in the following manner:

6.1.1. Regulation 25(4) and Regulation 16 of NCS Regulations shall not be applicable for issuance of debt securities by REITs.

6.1.2. The compliances required to be made with respect to Companies Act, 2013 or any filing to be made to Registrar of Companies in terms of the NCS Regulations, shall not apply to REITs for issuance of debt securities unless specifically provided in this chapter.

6.1.3. All other provisions of NCS Regulations shall apply to REITs subject to there being no conflict with REIT Regulations or circulars issued thereunder. In case of conflict, provisions of REIT Regulations or circulars issued thereunder shall prevail over NCS Regulations.

6.2. For the issuance of debt securities REITs shall appoint one or more debenture trustee registered with SEBI under Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Provided that a trustee to the REIT shall not be eligible to be appointed as debenture trustee to such issue of debt securities.

6.3. Any secured debt securities issued by REITs shall be secured by the creation of a charge on the assets of the REIT or holdco or SPV, having a value which is sufficient for the repayment of the amount of such debt securities and interest thereon.

6.4. With reference to NCS Regulations and LODR Regulation and circulars issued thereunder, the reference to the following terms made therein, should, for the purpose of this chapter, be construed as follows, unless otherwise required:

Reference to	To be construed as
Articles of Association/ Memorandum of Association	Trust Deed
Board of directors	Board of Director/Governing Body of the Manager
Directors of the company	Directors of the manager
Shares	Units
Shareholder	Unit holder
Shareholding pattern	Unit holding pattern
Share capital	Unit capital

Chapter 7. Issue and listing of Commercial Paper26

7.1. In terms of Reserve Bank Commercial Paper Directions, 2017 dated August 10, 2017 Real Estate Investment Trust (REIT) having net worth of INR 100 Crore or higher are eligible to issue commercial paper. REITs may issue listed commercial papers subject to the following:

(a) REITs shall abide by the guidelines prescribed by the Reserve Bank of India for issuances of commercial papers.

(b) REITs shall abide by the conditions of listing norms prescribed by SEBI under the SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021 and circulars issued thereunder.

(c) The issuance of listed CPs shall be within the overall debt limit permitted under SEBI (Real Estate Investment Trusts) Regulations 2014.

Chapter 8. Dematerialization of securities holdings by REITs in Hold Cos and SPVs27

8.1. Regulation 14(18) of SEBI (Real Estate Investment Trust) Regulations, 2014 (“REIT Regulations”) provides that the units of REIT shall be issued only in dematerialized form to all the applicants.

8.2. In order to promote dematerialization of securities, encourage ease of doing business, improve transparency in the dealings of securities of SPVs/ Hold Cos, REITs shall hold the securities of Hold Cos and SPVs in dematerialized form only. The Manager of the REIT shall ensure the same.

Chapter 9. Manner of conducting meetings of unit holders28

9.1. Regulation 22(3) of SEBI (Real Estate Investment Trusts) Regulations, 2014 provides that an annual meeting of all unit holders shall be held not less than once a year within one hundred twenty days from the end of financial year and the time between two meetings shall not exceed fifteen months. Further, Manager of REITs are also required to hold meetings of unit holders for certain matters specified under SEBI (Real Estate Investment Trusts) Regulations, 2014

9.2. Enabling participation of unit holders through Video Conferencing or other Audio Visual means ensures maximum participation of the unit holders in the decision-making process, irrespective of their geographical location, and delivers collaborative in-person experience at their convenience.

9.3. The Manager of the REIT are allowed to conduct meetings of unit holders through Video Conferencing or Other Audio Visual Means. While conducting meetings of unit holders through Video Conferencing or Other Audio Visual Means, the Manager of the REIT is required to adopt the following procedures in addition to any other requirement specified under the SEBI (Real Estate Investment Trusts) Regulations, 2014 and circulars issued thereunder:

(a) The recorded transcript of the meeting held through Video Conferencing or Other Audio Visual means shall be maintained in safe custody of the Manager of the REIT and shall also be uploaded by the Manager of the REIT on the website of the REIT as soon as possible after the conclusion of the meeting.

(b) Convenience of different persons positioned in different time zones shall be kept in mind by the Manager of the REIT before scheduling the meeting.

(c) All care must be taken to ensure that such meetings conducted through Video Conferencing or Other Audio Visual means allow two-way teleconferencing for the ease of participation of the unit holders and the participants are allowed to pose questions concurrently or given time to submit questions in advance on the email address of the REIT.

(d) The facility for joining the meeting shall be kept open at least fifteen minutes before the time scheduled to start the meeting and shall not be closed until the expiry of fifteen minutes after such scheduled time.

(e) Before the actual date of the meeting, the facility of remote e-voting shall be provided.

(f) Only those unit holders that are present in the meeting and have not cast their vote on resolutions through remote e-voting and are otherwise not barred from doing so, shall be allowed to vote through the e-voting system at the meeting.

(g) The chairperson of the meeting shall satisfy himself and cause to record the same before considering the business in the meeting that all reasonable efforts have been made by the Manager of the REIT to enable unit holders to participate and vote on the items being considered in the meeting.

(h) The chairperson present at the meeting shall also ensure that the facility of e-voting system is available for the purpose of conducting a poll during the meeting held through Video Conferencing or Other Audio Visual means on the business to be considered during the meeting.

(i) At least one independent director of Manager of the REIT and the auditor of the REIT or his/her authorized representative who is qualified to be the auditor shall attend such meeting.

(j) The notice for the meetings of unit holder shall make disclosures with regard to the manner in which framework provided in this circular shall be available for use by the unit holders and shall also contain clear instructions on how to access and participate in the meeting. Manager of the REIT shall also provide a helpline number through the registrar and share transfer agent, technology provider or otherwise, for unit holders who need assistance with the technology before or during the meeting. Such notice shall also include the following:

(i) Statement that the meeting will be convened through Video Conferencing or Other Audio Visual means in compliance with applicable provisions.

(ii) The date and time of the meeting through Video Conferencing or Other Audio Visual means.

(iii) Availability of notice of the meeting on website of the REIT and stock exchanges.

(iv) The manner in which unit holders who have not registered their e-mail address with REIT or depositories can cast their vote through remote e-voting or through the e-voting system during the meeting.

(v) The manner in which the unit holders who have not registered their e-mail addresses with REIT or depositories can get the same registered.

(vi) Any other detail considered necessary by the Manager of the REIT.

(k) The notice to the unit holders may be given through emails registered with the REIT or with depositories.

(l) Manager of the REIT shall contact all unit holders whose email addresses are not registered with the depositories, over possible / available mode of communication for registration of their email addresses.

(m) Manager of the REIT shall ensure that all other compliances associated with the provisions relating to meeting of unit holders are complied with and documents required to be provided to unit holders, if any, are provided through electronic mode.

9.4. Reporting and Monitoring:

(a) The Manager of the REIT shall disclose to the Stock Exchange and Trustee that the meeting of unit holders will be conducted through Video Conferencing or Other Audio Visual means.

(b) The trustee of the REIT shall attend meeting of unit holders and monitor the meetings conducted through Video Conferencing or Other Audio Visual means.

Chapter 10. Guidelines for preferential issue and institutional placement of units by listed REITs29

Definitions

10.1. “Institutional Placement” shall mean a preferential issue of units by a listed REIT only to Institutional Investors, as defined under REIT Regulations or circulars issued thereunder.

Conditions for issuance

10.2. A listed REIT may make a preferential issue of units or institutional placement of units under these guidelines, if it satisfies the following conditions:

10.2.1. A resolution of the existing unitholders approving the issue of units, in accordance with Regulation 22(6) of the REIT Regulations has been passed.

10.2.2. [Units of the same class, which are proposed to be allotted have been listed on a stock exchange for a period of at least six months prior to the date of issuance of notice to its unit holders for convening the meeting to pass the resolution in terms of clause 10.2.1. above.]30

10.2.3. The REIT has obtained in principle approval of the stock exchange(s) for listing of the units proposed to be issued under these guidelines.

10.2.4. The REIT is in compliance with all the conditions for continuous listing and disclosure obligations under the REIT Regulations and circulars issued thereunder.

10.2.5. None of the respective promoters or partners or directors of the sponsor(s) or manager or trustee of the REIT is a fugitive economic offender declared under section 12 of the Fugitive Economic Offenders Act, 2018 (17 of 2018).

10.2.6. [The REIT shall not make any subsequent institutional placement until the expiry of two weeks from the date of the prior institutional placement made pursuant to one or more resolutions.]31

Manner of issuance of units

10.3. Any issuance of units under these guidelines shall be done in the following manner:

10.3.1. The units shall be allotted in the dematerialized form only and shall be listed on the stock exchange(s) where the units of the REIT are listed.

10.3.2. Any offer or allotment through private placement shall not be made to more than 200 investors (excluding institutional investors) in a financial year.

10.3.3. Other than to the extent of the issue of units that is proposed to be made for consideration other than cash, full consideration for the units issued shall be paid by the prospective allottees prior to the allotment of the units, through banking channels. All such monies shall be kept by the Trustee in a separate bank account in the name of the REIT and shall only be utilized for adjustment against allotment of units or refund of money to the applicants till the time such units are listed.

10.3.4. The minimum allotment and trading lot for units issued shall be equivalent to the minimum allotment and trading lot as applicable to the units of the same class, under the extant provisions of the REIT Regulations or circulars issued thereunder.

10.3.5. [Post allotment, the REIT shall make an application for listing of the units to the stock exchange(s) and the units shall be listed within two working days from the date of allotment:

Provided that where the REIT fails to list the units within the specified time, the monies received shall be refunded through verifiable means within four working days from the date of the allotment, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT, the manager of the REIT and its director or partner who is an officer in default shall, on and from the expiry of the fourth working day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum.]32

10.3.6. The REIT shall file an allotment report with SEBI within seven days of allotment of the units providing details of the allottees and allotment made. Placement document, if applicable, shall also be filed with the Board along with the allotment report.

10.3.7. The issue of units shall comply with the conditions and manner of allotment for preferential issue and institutional placement as provided in paragraphs 10.4 to 10.11 below.

Manner of preferential issue of units by a listed REIT

10.4. Unit holders’ approval

10.4.1. The issuer shall, in an explanatory statement to the notice for the general meeting proposed for passing the resolution in terms of para 10.2.1 above, make appropriate disclosures including the following:

a) Objects of the preferential issue;

b) NAV of the REIT;

c) Maximum number of units to be issued;

d) Intent of the parties to the REIT, their directors or key managerial personnel to subscribe to the issue;

e) Unitholding pattern of the REIT before and after the preferential issue;

f) Time frame within which the preferential issue shall be completed;

g) Identity of the natural persons who are the ultimate beneficial owners of the units proposed to be allotted and/or who ultimately control the proposed allottees:

Provided that if there is any listed company, mutual fund, scheduled commercial bank, insurance company registered with the Insurance Regulatory and Development Authority of India in the chain of ownership of the proposed allottee, no further disclosure will be necessary.

Explanation: For the purpose of identification of the ultimate beneficial owners of the allottees, where the allottees are institutions/entities, the identification of such ultimate beneficial owners, shall be in accordance with the guidelines prescribed by the Board, if any.

10.5. Pricing of Units

A. Pricing of frequently traded units

10.5.1. [Where the units of the REIT are frequently traded, the price of units to be allotted pursuant to the preferential issue shall not be less than higher of the following:

i. the 90 trading days’ volume weighted average price of the related units quoted on the recognised stock exchange preceding the relevant date; or

ii. the 10 trading days’ volume weighted average prices of the related units quoted on a recognised stock exchange preceding the relevant date

10.5.2. A preferential issue of units to “institutional investors” not exceeding five in number, shall be made at a price not less than the 10 trading days’ volume weighted average prices of the related units quoted on a recognised stock exchange preceding the relevant date.

Explanation:

a) “Relevant date” for the purpose of clauses related to preferential issue of units shall be the date thirty days prior to the date on which the meeting of unitholders is held to consider the preferential issue. Where the relevant date falls on a weekend or a holiday, the day preceding the weekend or the holiday will be reckoned to be the relevant date.

b) “Relevant stock exchange” shall mean the recognised stock exchange in which the units of the REIT are listed and in which the highest trading volume in respect of the units of the REIT has been recorded during the preceding 90 trading days prior to the relevant date.

c) “Frequently traded units” for the purposes of these guidelines shall mean the units of the REIT, in which the traded turnover on any recognised stock exchange during the 240 trading days preceding the relevant date, is at least ten percent of the total number of issued and outstanding units of such class of units of the issuer:

Provided that where the number of issued and outstanding units of a particular class of units of the issuer is not identical throughout such period, the weighted average number of total units of such class of the issuer shall represent the total number of units.]33

B. Pricing of infrequently traded units

10.5.3. Where the units of the REIT are not frequently traded, the price determined by the REIT shall take into account the NAV of the REIT based on a full valuation of all existing REIT assets conducted in terms of REIT Regulations.

10.6. Lock-in

10.6.1. [The units allotted to sponsor(s) and sponsor group shall be locked-in for a period of three years from the date of trading approval granted for the units: Provided that units not more than twenty-five percent of the total unit capital of the REIT shall be locked-in for three years from the date of trading approval: Provided further that units allotted in excess of twenty-five percent of the total unit capital of the REIT shall be locked-in for one year from the date of trading approval.]34

[Explanation: For the computation of the lock-in requirement, the units held by the sponsor(s) and locked-in for three years, in the past in terms of Regulation 11 (3) of the REIT Regulations shall be taken into account. The units locked- in pursuant to Regulation 11(3) of the REIT Regulations shall not be put under fresh lock-in again, even though they are considered for computing the lock-in requirement, in case the said units are free of lock-in at the time of the preferential issue.]35

10.6.2. The units allotted to persons other than the sponsor(s) shall be locked-in for a period of one year from the date of trading approval for such units.

10.6.3. The entire pre-preferential issue unitholding of the allottees, if any, shall be locked-in from the relevant date up to a period of six months from the date of trading approval.

10.7. Allotment

10.7.1. [Preferential issue of units shall not be made to any person who has sold or transferred any units of the issuer during the 90 trading days preceding the relevant date. Further, where any person belonging to the sponsor(s) or Sponsor group(s) has sold/transferred their units of the issuer during the 90 days preceding the relevant date, all sponsors and members of sponsor group(s) shall be ineligible for allotment of units on a preferential basis.

Provided that this restriction on preferential issue of units shall not apply to a sponsor(s) or member of the sponsor group, in case any asset is being acquired by the REIT from that sponsor(s) and/or or member of sponsor group(s), and preferential issue of units is being made to that sponsor and/or member of the sponsor group, as full consideration for the acquisition of such asset.]36

10.7.2. Allotment pursuant to the unit holders’ resolution shall be completed within a period of fifteen days from the date of passing of such resolution:

Provided that in case the approval of any regulatory, governmental or statutory body / agency is required, then in such cases the period of fifteen days will commence from the date of approval from such regulatory, governmental or statutory body/agency:

Provided further that where the REIT fails to allot the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the resolution, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT and the manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum.

Manner of institutional placement of units by a listed REIT

10.8. Placement document

10.8.1. The issuer shall appoint one or more merchant bankers, which are registered with the Board, as lead manager(s) to the issue.

10.8.2. The lead manager(s) shall, while seeking in-principle listing approval for the units, furnish to each stock exchange on which the same class of units of the issuer are listed, a due diligence certificate stating that the units are being issued under institutional placement and that the issuer complies with requirements of these guidelines, and also furnish a copy of the preliminary placement document along with any other document required by the stock exchange.

10.8.3. The lead manager(s) shall exercise due diligence and shall satisfy themselves with all aspects of the Issue including the veracity and adequacy of disclosures in the placement document.

10.8.4. The institutional placement shall be made on the basis of a placement document which shall contain all material information, including disclosures as specified in Annexure – 5.

10.8.5. The preliminary placement document and the placement document shall be serially numbered and copies of the same shall be circulated only to select investors.

10.8.6. The preliminary placement document and the placement document shall be placed on the websites of the relevant stock exchange(s) and of the issuer with a disclaimer to the effect that it is in connection with an institutional placement and that no offer is being made to the public or to any other category of investors.

10.9. Pricing of Units

10.9.1. [The institutional placement shall be made at a price not less than the average of the weekly high and low of the closing prices of the units of the same class quoted on the stock exchange during the two weeks preceding the relevant date:

Provided that the REIT may offer a discount of not more than five percent on the price so calculated, subject to approval of unitholders through a resolution as specified in para 10.2.1.

Explanation: “relevant date” for the purpose of clauses related to institutional placement shall be the date of the meeting in which the board of directors of the manager decides to open the issue.]37

10.10. Transferability

10.10.1. The units allotted through the institutional placement shall not be sold by the allottee for a period of one year from the date of allotment, except on a recognised stock exchange.

10.11. Allotment

10.11.1. Allotment pursuant to the unit holders’ resolution shall be completed within a period of 365 days from the date of passing of such resolution:

Provided that where the REIT fails to allot the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the closure of the issue, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT and the manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum.

10.11.2. [No allotment shall be made, either directly or indirectly, to any institutional investor who is a sponsor(s) or manager, or is a person related to, or related party or associate of, the sponsor(s) or the manager.

Provided that allotment of units can be made to the sponsor for un-subscribed portion in the institutional placement subject to following conditions

a. at least ninety percent of the issue size has been subscribed

b. objects of the issue is acquisition of assets from that sponsor

c. units allotted to sponsor shall be locked in as per clause 10.6 above

d. unitholders approval shall be taken for unsubscribed portion being allotted to sponsor]38

Chapter 11. Guidelines for rights issue of units by a listed REIT39

11.1. Conditions for issuance

11.1.1. No REIT shall make a rights issue of units unless the following conditions

are satisfied:

a) A resolution of the board of directors of the manager approving the rights issue of units and determining the record date has been passed.

b) Units of the same class, which are proposed to be allotted are already listed on a stock exchange.

c) The REIT has obtained in-principle approval of the stock exchange(s) for listing of units proposed to be issued under these guidelines.

d) The REIT is in compliance with the continuous listing and disclosure obligations under the REIT Regulations and circulars issued thereunder. Provided that imposition of only monetary fines by stock exchanges on the REIT shall not be a ground for ineligibility for undertaking issuances under these guidelines.

e) None of the respective promoters or partners or directors of the sponsor(s) or sponsor group or manager or trustee of the REIT is a fugitive economic offender declared under section 12 of the Fugitive Economic Offenders Act, 2018 (17 of 2018).

f) None of the respective promoters or partners or directors of the sponsor(s) or sponsor group or manager or trustee of the REIT

i. is debarred from accessing the securities market by the Board;

ii. is a promoter, director or person in control of any other company or a sponsor, manager or trustee of any other REIT which is debarred from accessing the capital market under any order or directions made by the Board;

11.2. Appointment of merchant banker(s) and other intermediaries

11.2.1. The manager on behalf of the REIT, in line with Regulation 10(5) of REIT Regulations, shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the merchant banker(s), to carry out the obligations relating to the issue.

11.2.2. If the REIT desires to have the issue underwritten, it shall appoint underwriters in accordance with the Securities and Exchange Board of India (Underwriters) Regulations, 1993.

11.2.3. In case of an underwritten issue, the merchant banker(s) shall undertake minimum underwriting obligations as specified in the Securities and Exchange Board of India (Merchant Bankers) Regulations, 1992.

11.2.4. The merchant banker(s) shall exercise due diligence and shall satisfy themselves with all aspects of the issue including the veracity and adequacy of disclosures in the letter of offer.

11.3. Draft Letter of Offer and Letter of Offer

11.3.1. The manager, on behalf of the REIT shall file a draft letter of offer with the Board through the lead merchant banker along with filing fees as specified in Schedule II of REIT Regulations.

11.3.2. The lead merchant banker shall submit the following to the Board along with the draft letter of offer:

a) a certificate, confirming that an agreement has been entered into between the manager on behalf of the REIT and the merchant bankers;

b) a due diligence certificate along the lines of Form A of Annexure – 1. 11.3.3. The manager, on behalf of the REIT shall also file the draft letter of offer with the stock exchange(s) where the units of the REIT are listed and further make it public by posting the same on the website of the stock exchange(s) for seeking public comments for a period of seven working days from the date of filing the draft letter of offer.

11.3.4. The draft letter of offer shall also be displayed on the website of the REIT and the merchant bankers.

11.3.5. The manager shall, after filing the draft letter of offer and letter of offer with the Board, make appropriate advertisement on the website of the sponsor, manager and stock exchanges.

11.3.6. The manager may also issue such advertisement in any newspaper and on the website of the REIT.

11.3.7. The Board may specify changes or issue observations, if any, on the draft letter of offer within fifteen days from the later of the following dates:

a) the date of receipt of the draft letter of offer, filed under sub-clause 11.3.1; or

b) the date of receipt of satisfactory reply from the lead merchant banker(s), where the Board has sought any clarification or additional information from them; or

c) the date of receipt of clarification or information from any regulator or agency, where the Board has sought any clarification or information from such regulator or agency; or

d) the date of receipt of a copy of in-principle approval letter issued by the stock exchanges.

11.3.8. If the Board specifies any changes or issues observations on the draft letter of offer, the manager on behalf of the REIT and lead merchant banker(s) shall carry out such changes in the draft letter of offer and shall submit to the Board an updated draft letter of offer complying with the observations issued by the Board and highlighting all changes made in the draft letter of offer before filing the letter of offer with the stock exchanges.

11.3.9. The lead merchant banker shall, along with filing of the letter of offer with the Board and the stock exchange(s), furnish to the Board, a due diligence certificate along the lines of Form B of Annexure – 1 of this master circular.

11.3.10. The draft letter of offer and letter of offer shall contain disclosures as specified in Annexure – 6.

11.3.11. The manager, on behalf of the REIT, and the merchant banker(s) shall ensure that the letters of offer are hosted on the websites of the REIT, merchant bankers and the stock exchanges where the units are listed and their content is the same as the versions filed with the Board and the stock exchange(s), as applicable.

11.3.12. The draft letter of offer and letter of offer, as applicable, shall also be furnished to the Board in soft copy.

11.4. Application

11.4.1. The application form for the issue shall be prepared by the merchant banker(s) and the merchant banker(s) shall make arrangements for distribution of the application form.

11.5. Pricing of Units

11.5.1. The manager on behalf of the REIT, in consultation with the lead merchant banker(s), shall decide the issue price before determining the record date. 11.5.2. The issue price shall be disclosed in the letter of offer filed with the Board and the stock exchange(s).

11.6. Timelines

11.6.1. The manager, on behalf of the REIT, shall announce the record date to stock exchange(s) at least three working days (excluding the date of intimation and the record date) prior to the record date. The REIT shall not withdraw its rights issue after announcement of the record date.

Provided that in case the REIT withdraws the rights issue after announcing the record date, it shall not be eligible to make an application for listing of any of its units on any stock exchange for a period of twelve months from the record date.

11.6.2. The rights issue shall open within three months from the record date. 11.6.3. The rights issue shall be kept open for at least three working days but not more than fifteen working days.

11.7. Manner of issuance of units

11.7.1. Any issuance of units under these guidelines shall be done in the following manner:

a) The rights entitlements shall be credited to the demat account of the unitholders before the date of opening of the issue. The rights entitlements shall include a right exercisable by the person concerned to renounce the units offered to him/her or any of them in favour of any other person and the draft letter of offer, letter of offer and the notice sent to the unitholders shall contain a statement to this effect.

b) The units shall be allotted in the dematerialized form only and shall be listed on the stock exchange(s) where the units of the REIT are listed.

c) All investors would be required to mandatorily use Application Supported by Blocked Amount (ASBA) as a payment mode, whether existing unitholders or renouncees and follow the procedure for rights issues of securities specified by the Board.

11.8. Subscription, Allotment and Listing of Units

11.8.1. Minimum Subscription

a) The minimum subscription to be received in the rights issue shall be 90% of the issue size through the letter of offer.

b) If the minimum subscription as specified under (a) above is not received, the application monies shall be refunded to the applicants forthwith, but not later than 15 days from the issue closing date.

11.8.2. The sponsor(s), their associates and members of the sponsor group who are unitholders as on the record date, may choose to subscribe to additional units subject to disclosure of such intent in the draft letter of offer and letter of offer.

Provided that such additional subscription over and above the entitlement shall be subject to compliance with the minimum public unitholding requirements.

11.8.3. The minimum allotment and trading lot for units issued shall be equivalent to the minimum allotment and trading lot as applicable to the units of the same class, under the extant provisions of the REIT Regulations or circulars issued thereunder.

11.8.4. The REIT shall not make any allotment in excess of the units offered through the letter of offer except in case of oversubscription for the purpose of rounding off to even lots to make allotment, in consultation with the designated stock exchange.

Provided that in case of oversubscription, an allotment of not more than one per cent. of the issue size may be made for the purpose of making allotment in minimum even lots.

11.8.5. Allotment shall be made in the following manner:

a) full allotment to those eligible unitholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s), who has/have applied for the units renounced in their favour, in full or in part, as adjusted for fractional entitlement.

b) allotment to eligible unitholders who having applied for the units in full to the extent of their rights entitlement and have also applied for additional units shall be made as far as possible on an equitable basis, having due regard to the number of units held by them on the record date, provided there is an under-subscribed portion after making allotment in (a) above.

c) allotment to the renouncees, who having applied for the units renounced in their favour and also applied for additional units, provided there is an under-subscribed portion after making full allotment specified in (a) and (b) above. The allotment of such additional units may be made on a proportionate basis.

d) Allotment to sponsor(s), their associates and members of sponsor group, who are unitholders on the record date and who have disclosed their intent to subscribe to additional units in terms of 11.8.2 above, if there is an unsubscribed portion after making full allotment as per clause (a), (b) and (c) above.

e) Allotment to the underwriter appointed for the issue, if any, at the discretion of the board of directors of the manager, subject to disclosure in the draft letter of offer and / or letter of offer as applicable. Full allotment to those eligible unitholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s), who has/have applied for the units renounced in their favour, in full or in part, as adjusted for fractional entitlement.

11.8.6. The units allotted in the manner specified above shall be listed within six working days from the issue closing date.

11.9. Restriction on further capital issues

11.9.1. The REIT shall not make any further issue of units in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, institutional placement, issue of bonus shares or otherwise during the period between the date of filing the draft letter of offer with the Board and the listing of the units offered through the letter of offer or refund of application monies.

11.10. The REIT shall file an allotment report with the Board providing details of the allottees and allotment made within 15 days of the issue closing date.

Fast Track Rights Issue

11.11. [A REIT satisfying the conditions mentioned below and desirous of issuing units under fast track rights issue shall, for such an issue, follow guidelines specified in this master circular except those under paragraphs 11.3.1, 11.3.2, 11.3.7, and 11.3.8 above:

11.11.1. the units of the REIT have been listed on any stock exchange for a period of at least three years immediately preceding the record date;

11.11.2. all the units of the REIT are held in demat form on the record date;

11.11.3. the average market capitalisation of public unitholding of the REIT is at least two hundred and fifty crore rupees;

11.11.4. the REIT is in compliance with the listing and disclosure requirements of the REIT Regulations;

11.11.5. the REIT has redressed at least ninety-five per cent. of the complaints received from the investors till the end of the quarter immediately preceding the month of the record date;

11.11.6. no show-cause notices have been issued or prosecution proceedings have been initiated by the Board and pending against the REIT, parties to the REIT or their respective promoters or partners or directors as on the record date;

11.11.7. the REIT, parties to the REIT or their respective promoters or partners or directors has not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during three years immediately preceding the record date;

11.11.8. units of the REIT have not been suspended from trading as a disciplinary measure during last three years immediately preceding the record date;

11.11.9. no regulatory action has been imposed on the REIT in the three years preceding the year in which rights issue is proposed;

Provided that imposition of only monetary fines by stock exchanges on the REIT shall not be a ground for ineligibility for undertaking issuances under this clause.

11.11.10. there shall be no conflict of interest between the lead merchant banker(s) and the REIT or parties to the REIT in accordance with the applicable regulations;

11.11.11. The sponsor(s) and sponsor group shall mandatorily subscribe to their rights entitlement and shall not renounce their rights, except to the extent of renunciation within the respective sponsor group or for the purpose of complying with minimum public shareholding norms prescribed under the REIT Regulations, 2014;

11.11.12. there are no audit qualifications on the audited accounts of the REIT in respect of those financial years for which such accounts are disclosed in the letter of offer;

Explanation: For the purpose of this chapter, “audit qualifications” shall be those disclosed under applicable accounting standard relating to modification to the opinion in the independent auditor’s report and requires a qualified opinion, adverse opinion or disclaimer of opinion for material misstatements.

11.12. The REIT shall file the letter of offer with the Board in accordance with paragraph 11.3.9 and shall pay fees to the Board as specified in Schedule II of REIT Regulations for issuing units through fast track rights issue route.]40

Chapter 12. Encumbrance on units of REITs41

12.1. Encumbrance on units

12.1.1. Entities required to hold units in terms of Regulation 11(3) of the REIT Regulations may create encumbrance on such units during the mandatory holding period wherein encumbrance shall include pledge, lien, negative lien, non-disposal undertaking etc. or any other covenant, transaction, condition or arrangement in the nature of encumbrance:

Provided that the conditions for creation and invocation of encumbrance, provided in this chapter, are also included in the agreement executed for the purpose of creation of such encumbrance:

12.2. Conditions for invocation during the mandatory holding period

12.2.1. Such encumbrance shall not be permitted to be invoked during the holding period prescribed in terms of Regulation 11(3) of the REIT Regulations unless the following conditions are satisfied:

a) the person(s) invoking the encumbrance (whether directly or through any trustee or agent acting on its behalf) shall get itself or its nominee to become re-designated sponsor upon compliance with the terms and conditions for re-designation of sponsor as specified under REIT Regulations:

Provided that this condition shall not be applicable in case the person invoking such encumbrance is already a member of sponsor group.

b) The re-designated sponsor shall fulfil the obligations specified for sponsor under REIT Regulations.

12.3. Obligation of entity creating encumbrance

12.3.1. Sponsor(s) and sponsor group creating encumbrance on the units held by them, shall provide details of the encumbrance to the manager of the REIT within two working days from the date of creation of such encumbrance in the format specified at Annexure – 7.

Any change in the above information pursuant to release or invocation of encumbrance, or in any other manner, shall also be informed to the manager of the REIT within two working days from the date of such event.

12.4. Other obligations

12.4.1. The REIT shall within two working days from the receipt of details in terms of clause 12.3 shall disclose such information to every stock exchange where units of the REIT are listed.

Chapter 13. Manner and mechanism of providing exit option to dissenting unit holders42

13.1. Definitions: For the purpose of this chapter:

13.1.1. “Acquirer” means,

a) a person who, along with persons acting in concert, intends to acquire units of a listed REIT; or

b) a person who intends to be an inducted sponsor as defined under Regulation 2(1)(qaa) of REIT Regulations; or

c) a sponsor being subject to a change in control, and required to provide an exit option in terms of Regulation 22(6A) or

Regulation 22(8) of the REIT Regulations, as the case may be;

13.1.2. “persons acting in concert” means,—

a) persons who, with a common objective or purpose of acquisition of units of the REIT, pursuant to an agreement or understanding, formal or informal, directly or indirectly co-operate for acquisition of units of the REIT.

b) Without prejudice to the generality of the foregoing, the persons falling within the following categories shall be deemed to be persons acting in concert with other persons within the same category, unless the contrary is established, —

i. a company, its holding company, subsidiary company and any company under the same management or control;

ii. a company, its directors, and any person entrusted with the management of the company;

iii. directors of companies referred to in item i) and ii) of this sub-clause and associates of such directors;

iv. immediate relatives;

v. an institutional investor and wherever applicable its sponsor, trustees, trustee company, asset management company;

vi. a collective investment scheme and its collective investment management company, trustees and trustee company;

vii. a merchant banker and its client, who is an Acquirer;

viii. a portfolio manager and its client, who is an Acquirer;

ix. banks, financial advisors and stock brokers of the Acquirer, or of any company which is a holding company or subsidiary of the Acquirer, and where the Acquirer is an individual, of the immediate relative of such individual:

Provided that this sub-clause shall not apply to a bank whose sole role is that of providing normal commercial banking services or activities in relation to an acquisition/exit option under REIT Regulations;

x. an investment company or fund and any person who has an interest in such investment company or fund as a shareholder or unit holder having not less than 10 per cent of the paid-up capital of the investment company or unit capital of the fund, and any other investment company or fund in which such person or his associate holds not less than 10 per cent of the paid-up capital of that investment company or unit capital of that fund:

Provided that nothing contained in this sub-clause shall apply to holding of units of mutual funds registered with the Board;

Explanation—For the purposes of this clause “associate” of a person means any person as defined under Regulation 2(1)(b) of REIT Regulations and shall also include-

i) trusts of which such person or his immediate relative is a trustee;

ii) partnership firm in which such person or his immediate relative is a partner; and

iii) members of Hindu undivided families of which such person is a coparcener

13.1.3. “Cut-off date” means a date not more than three working days before the date of meeting for determining the eligibility to vote;

13.1.4. “Dissenting unit holders” means unit holders as on the cut-off date who have not voted in favour of the resolution proposed in terms of Regulation 22(6A) or Regulation 22(8) of the REIT Regulations, irrespective of whether present or not;

13.1.5. “Frequently traded units” shall have the same meaning as assigned to it in paragraph 10.5.2 of this master circular.

13.1.6. [“Relevant date” means the last day of voting for resolution under Regulation 22(6A) or Regulation 22(8) of the REIT Regulations.

Provided that in case an acquisition described under Regulation 22(6A) or change in sponsor or inducted sponsor or change in control of sponsor or inducted sponsor under regulation 22(8) of REIT Regulations is triggered pursuant to an open offer under the provisions of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, the relevant date shall mean the date of public announcement made for the acquisition in terms of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011.]43

13.2. An acquirer providing exit option to dissenting unitholders in terms of this chapter shall appoint one or more merchant bankers, registered with the Board, as lead manager(s) for the exit option/offer, who shall ensure compliance with the provisions of REIT Regulations and this chapter. Lead manager(s) shall send the Letter of Offer (LoF) to all dissenting unit holders and shall also file the same along with the due diligence certificate, in line with format specified in Form A in Annexure – 1 of this master circular, with the Exchange(s). The broad contents of LoF are indicated in Annexure – 8.

13.3. Upon completion of exit option process, a due diligence certificate in line with format specified in the Form D in Annexure – 1 of the master circular, shall be filed by the lead manager(s) with the Board within two working days of payment of consideration by the acquirer.

13.4. Manner and mechanism of exit option:

13.4.1. The Acquirer shall facilitate tendering of units by the unit holders and settlement of the same through the stock exchange mechanism as specified by SEBI for the purpose of takeover, buy-back and delisting in case of equity listed companies.

13.4.2. Manager shall be entitled to receive from the Acquirer all expenses incurred and payable to external agencies related to the exit offer process prescribed in this chapter.

13.4.3. Units tendered in exit option shall be in multiples of the trading lot as applicable to the units of the same class of the REIT, under the existing provisions of the REIT Regulations and circulars issued thereunder.

13.4.4. Dissenting Unit holders who are unitholders on the cut-off date for the purpose of voting shall be eligible to avail the exit option/offer only in respect of such number of units held by such Dissenting Unitholders on the cut-off date.

13.4.5. A summary of activities pertaining to exit option/offer is indicated below along with the prescribed timelines:

Activity Description	Timelines
Acquirer shall give notice to the Manager for the purpose of obtaining approval of the unit holders under Regulation 22(6A) or Regulation 22(8) of REIT Regulations. Further, a person being inducted as a sponsor shall give declaration to Manager with regard to satisfying the eligibility conditions prescribed for a sponsor under REIT Regulations.
On receipt of notice, Manager shall intimate to stock exchange(s)	Immediately but not later than twenty four hours from the receipt of such notice
Manager shall convene a meeting of unit holders for voting	Voting to be completed not later than three working days from the cut-off date and within twenty one days from the date of receipt of notice from the acquirer
Intimation of outcome of the unit holders’ meeting by the Manager to Acquirer and stock exchange(s) along with the number of dissenting unit holders and total number of units held by them as of the cut-off date, as certified by its compliance officer.The day of aforesaid intimation by Manager shall be construed as “Date of Intimation”.	Within forty eight hours of the last day of voting
Acquirer through the Lead Manager shall give a public notice to stock exchange(s) and Manager regarding his intention of providing exit option to dissenting unit holders	Within twenty four hours of the Date of Intimation
Upon receipt of public notice from the Lead Manager, Manager shall provide the list of dissenting unit holders to the Lead Manager(s).	Immediately but not later than twenty four hours from the receipt of public notice from the Acquirer
Acquirer through the Lead Manager(s) shall send the Letter of Offer (LoF) to all dissenting unit holders and file a copy of the same with the stock exchange(s). Lead Manager(s) shall exercise due diligence with regard to all information and disclosures contained in the LoF. The stock exchange(s) shall disseminate the LoF on its website as soon as it receives the same.	Within three working days from the date of public notice by the Acquirer regarding exit option/offer
Acquirer shall create an escrow account wherein the aggregate amount of consideration based on the list of dissenting unit holders provided by the Manager to Lead Manager would be deposited in the manner specified at para 13.4.7 below.	At least two working days prior to opening of the tendering period.
Tender date and tender period for tendering units in exit option	Seventh working day from the “Date of Intimation” Tender period shall be five working days.
Payment of consideration to dissenting unit holders by the Acquirer	Within a period of three working days from the last date of the tendering period
Lead Manager shall submit a report to Manager that the payment has been duly made to all the dissenting unit holders whose units have been accepted in the exit option. Based on the information received from Lead Manager, Manager shall update aggregate number of units tendered, accepted, payment of the consideration and the post-exit option unit holding pattern of the REIT with stock exchange(s).	Within two working days from the date of payment of consideration

13.4.6. [However, in case an acquisition described under Regulation 22(6A) or change in sponsor or change in control of sponsor or inducted sponsor under Regulation 22(8) of REIT Regulations is triggered pursuant to an open offer under the provisions of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, the summary of activities pertaining to exit option/offer is indicated below along with the prescribed timelines:

Activity Description	Timelines
Acquirer to give first notice to Manager regarding acquisition which triggers the provision of Regulation 22(6A) or Regulation 22(8) of REIT Regulations.	Along with Public Announcement made for the acquisition in terms of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011
On receipt of notice, Manager shall intimate to stock exchange(s)	Immediately but not later than twenty four hours from the receipt of such notice
Acquirer shall give second notice to the Manager for the purpose of obtaining approval of the unit holders under Regulation 22(6A) or Regulation 22(8) of REIT Regulations. The acquirer shall also confirm to the Manager that it shall give exit option to dissenting unit holders in case approval of the requisite majority is not received. Further, a person being inducted as a sponsor shall give declaration to Manager with regard to satisfying the eligibility conditions prescribed for a sponsor under REIT Regulations.	Not later than two working days from the completion of the acquisition which triggered the provisions of Regulation 22(6A) or Regulation 22(8) of REIT Regulations
On receipt of second notice, Manager shall intimate to stock exchange(s)	Immediately but not later than twenty four hours from the receipt of such second notice
Manager shall convene a meeting of unit holders for voting	Voting to be completed not later than three working days from the cut-off date and within twenty one days from the date of receipt of second notice from the acquirer.
Intimation of outcome of the unit holders’ meeting by the Manager to Acquirer and stock exchange(s) along with the number of dissenting unit holders and total number of units held by them as of the cut-off date, as certified by its compliance officer. Manager shall provide the list of dissenting unit holders to the Lead Manager(s). The day of aforesaid intimation by Manager shall be construed as “Date of Intimation”.	Within forty-eight hours of the last day of voting
Acquirer through the Lead Manager(s) shall send the Letter of Offer (LoF) to all dissenting unit holders and file a copy of the same with the stock exchange(s). Lead Manager(s) shall exercise due diligence with regard to all information and disclosures contained in the LoF. The stock exchange(s) shall disseminate the LoF on its website as soon as it receives the same.	Within three working days from the Date of Intimation
Acquirer shall create an escrow account wherein the aggregate amount of consideration based on the list of dissenting unit holders provided by the Manager to Lead Manager would be deposited in the manner specified at para 13.4.7 below.	At least two working days prior to opening of the tendering period.
Tender date and tender period for tendering units in exit option	Seventh working day from the “Date of Intimation” Tender period shall be five working days.
Payment of consideration to dissenting unit holders by the Acquirer	Within a period of three working days from the last date of the tendering period
Lead Manager shall submit a report to Manager that the payment has been duly made to all the dissenting unit holders whose units have been accepted in the exit option. Based on the information received from Lead Manager, Manager shall update aggregate number of units tendered, accepted, payment of the consideration and the post-exit option unit holding pattern of the REIT with stock exchange(s).	Within two working days from the date of payment of consideration]⁴⁴

13.4.7. The escrow account referred to in aforesaid table may be in the form of —

a) cash deposited with any scheduled commercial bank; and/or

b) bank guarantee issued in favour of the Lead Manager to the exit option/offer by any scheduled commercial bank;

i. In the event of the escrow account being created by way of a bank guarantee, the Acquirer shall also ensure that at least one per cent of the total consideration payable is deposited in cash with a scheduled commercial bank as a part of the escrow account.

ii. For such part of the escrow account as is in the form of a cash deposit with a scheduled commercial bank, the acquirer shall while opening the account, empower the lead manager to the exit option/offer to instruct the bank to issue a banker’s cheque or demand draft or to make payment of the amounts lying to the credit of the escrow account.

iii. For such part of the escrow account as is in the form of a bank guarantee, such bank guarantee shall be in favour of the lead manager to the exit option/offer and shall be kept valid throughout the period of exit option/offer and for an additional period of thirty days after completion of payment of consideration to unit holders who have tendered their units in acceptance of the exit option/offer.

13.5. Exit Price

13.5.1. The exit price payable to the dissenting unit holders shall be highest of the following:

a) the highest negotiated price per unit of the REIT for any acquisition under the agreement attracting the obligation of exit option;

b) the volume-weighted average price paid or payable for acquisitions, whether by the proposed Acquirer or any person acting in concert with them, during the fifty-two weeks immediately preceding the relevant date;

c) the highest price paid or payable for any acquisition, whether by the proposed Acquirer or any person acting in concert with them, during the twenty-six weeks immediately preceding the relevant date;

d) the volume-weighted average market price of such units for a period of sixty trading days immediately preceding the relevant date as traded on the stock exchange where the maximum volume of trading in the units of the REIT are recorded during such period, provided such units are frequently traded;

e) Where the units of the REIT are not frequently traded, the price determined by the Acquirer and the lead manager to the exit option/offer taking into account valuation parameters including the NAV of the REIT based on a full valuation of all existing REIT assets conducted in terms of REIT Regulations, book value, comparable trading multiples, and such other parameters as are customary for valuation of units of such REITs.

13.5.2. Where the Acquirer has acquired or agreed to acquire whether by himself or through or with persons acting in concert with him any units of the REIT between the relevant date and the date of payment of consideration to dissenting unit holders, whether by subscription or purchase, at a price higher than the exit option price, the exit option price shall stand revised to the highest price paid or payable for any such acquisition:

Provided that no such acquisition shall be made after the third working day prior to the commencement of the tendering period and until the expiry of the tendering period.

13.5.3. Where the Acquirer or persons acting in concert with him acquires units of the REIT during the period of twenty-six weeks after the tendering period at a price higher than the exit option price, the Acquirer and persons acting in concert shall pay the difference between the highest acquisition price and the exit option price, to all the unit holders whose units were accepted in the exit option/offer, within sixty days from the date of such acquisition:

Provided that this provision shall not be applicable to acquisitions under another exit option/offer under REIT Regulations or open market purchases made in the ordinary course on the stock exchanges, not being negotiated acquisition of units of the REIT whether by way of bulk deals, block deals or in any other form.

13.5.4. [In case an acquisition described under Regulation 22(6A) or change in sponsor or inducted sponsor or change in control of sponsor or inducted sponsor under regulation 22(8) of REIT Regulations is triggered pursuant to an open offer under the provisions of SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011, the exit option price shall stand enhanced by an amount equal to a sum determined at the rate of ten per cent per annum for the period between the first notice date and second notice date.]45

13.6. Maintenance of minimum public unitholding

13.6.1. If the units tendered in exit option are such that, if accepted may result in public unit holding below the minimum public unit holding norm prescribed under REIT Regulations, in such scenario, tendered units shall be accepted on proportionate basis so as to maintain the minimum public unit holding post completion of exit option process.

Chapter 14. Investor Charter and Disclosure of Investor Complaints by Merchant Bankers for public offers by REITs46

14.1. Publication of Investors Charter

14.1.1. All registered Merchant Bankers are advised to disclose on their websites, the Investor Charter for Public Offer of units by REITs, as provided at Annexure – 9.

14.2. Disclosure of Investor complaints

14.2.1. Additionally, all the registered Merchant Bankers shall disclose on their respective websites, the data on complaints received against them or against issues dealt by them and redressal thereof, on each of the aforesaid categories separately as well as collectively, latest by 7th of succeeding month, as per the format provided at Annexure – 10.

Chapter 15. Format for Annual Secretarial Compliance Report for REITs47

15.1. Regulation 26D of SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) requires as under:

(1) The Manager shall submit a secretarial compliance report given by a practicing company secretary to the stock exchanges, in such form as specified, within sixty days from end of each financial year.

(2) The secretarial compliance report referred to in sub-regulation (1) of this regulation shall be annexed with the annual report of the REIT.

15.2. Accordingly, the following shall be complied with regard to annual secretarial compliance report:

(a) The Manager of the REIT, on an annual basis, shall appoint a practicing company secretary to examine the compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, consequent to which, the practicing company secretary shall submit a report to the Manager of the REIT.

(b) The format for the annual secretarial compliance report is placed at Error! Reference source not found.2.

(c) The Manager of the REIT shall provide all such documents/information as may be sought by the practicing company secretary for the purpose of providing secretarial compliance report.

15.3. Reporting and Monitoring

(a) The Manager of the REIT shall submit the annual secretarial compliance report in the aforesaid format to the stock exchanges within sixty days from the end of each financial year. The annual secretarial compliance report shall also be made part of annual report of the REIT.

(b) The stock exchanges shall monitor the compliance of the above requirement and take appropriate action as specified by the Board from time to time.

Chapter 16. Format of Compliance report on Governance for REITs48

16.1. Regulation 26E of SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) requires as under:

(1) The Manager shall submit a quarterly compliance report on governance in the format as may be specified by the Board, to the recognized stock exchange(s) within twenty-one days from the end of each quarter.

(2) The report referred in sub-regulation (1) of this regulation shall be signed either by the compliance officer or the chief executive officer of the Manager.

16.2. Accordingly, the formats of Compliance Report on Governance shall be as under:

(a) Part A of Annexure – 13 – within twenty one days from the end of each quarter;

(b) Part B of Annexure – 13 – within twenty one days from the end of financial year on an annual basis;

16.3. Reporting and Monitoring

(a) The manager of the REIT shall submit the compliance report on governance in the aforesaid format to the stock exchanges within the timelines as specified above. The compliance report on governance shall also be made part of annual report of the REIT.

(b) The stock exchanges shall monitor the compliance of the above requirements and take appropriate action as specified by the Board from time to time.

Chapter 17. Manner of achieving minimum public unitholding – REITs49

17.1. Regulation 14(2A) of SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REIT Regulations”) inter-alia mandates that any listed REIT which has public unitholding below twenty-five percent, shall increase its public unitholding to at least twenty-five percent within a period of three years from the date of listing of units pursuant to initial offer.

17.2. In order to facilitate REITs to achieve minimum public unitholding compliance as required under REIT Regulations, Manager of the REIT shall adopt any of the following methods:

No.	Method	Specific conditions, if any, applicable
1.	Issuance of units to public through offer document	–
2.	Offer for sale of units held by Sponsor(s) / Manager / and their associates/related parties and Sponsor Group to public through offer document	–
3.	Offer for sale of units held by Sponsor(s) / Manager / and their associates/related parties and Sponsor Group through the Stock Exchange mechanism i.e., the secondary market, in terms of circular reference No. SEBI/HO/MRD/MRD-PoD- 3/P/CIR/2023/10 dated January 10, 2023.	–
4.	Rights issue to public unitholders	Sponsor(s) / Manager / and their associates/related parties and Sponsor Group unitholders shall forgo their entitlement to units that may arise from such issue.
5.	Bonus Issue to public unitholders	Sponsor(s) / Manager / and their associates/related parties and Sponsor Group unitholders shall forgo their entitlement to units that may arise from such issue.
6.	Allotment of units under Institutional placement
7.	Sale of units held by Sponsor(s) / Manager / and their associates/related parties and Sponsor Group in the open market in any one of the following ways, subject to compliance with the conditions specified. Sponsor(s) / Manager / and their associates/related parties and Sponsor Group can sell up to 2% of the total paid-up unit capital of the REIT, subject to five times’ average monthly trading volume of the units of the REIT, every financial year till the due date for minimum public unitholding requirement as per REIT Regulations (or)ii. Sponsor(s) / Manager / and their associates/related parties and Sponsor Group can sell upto a maximum of 5% of the paid-up unit capital of the REIT during a financial year subject to the condition that the public unitholding in the REIT shall become 25% after completion of such sale. The sale can be a single tranche or in multiple tranches not exceeding a period of 12 months and the amount of units to be sold shall not exceed the trading volume of the units of the REIT during the preceding 12 months from the date of announcement.	i. Sponsor(s) / Manager / and their associates/related parties and Sponsor Group can use either the mechanism specified at Sl. No. 7(i) or 7(ii) to comply with minimum public unitholding requirements, but not both. ii. The Manager of the REIT shall, at least one trading day prior to every such proposed sale, announce the following details to the stock exchange(s) where its units are listed: a) the intention of the Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group to sell and the purpose of sale; b) the details of Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group, who propose to divest their unitholding; c) total number of units and percentage of unitholding in the REIT that is proposed to be divested; and d) the period within which the entire divestment process will be completed. iii. The Manager of the REIT shall also give an undertaking to the recognized stock exchange(s) obtained from the Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group that they shall not buy any units in the open market on the dates on which the units are being sold by them as stated above. iv. The REIT, its Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group shall ensure compliance with all applicable legal provisions including that of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and REIT Regulations.
8.	Transfer of units held by Sponsor(s) / Manager / and their associates/related parties and Sponsor Group to an Exchange Traded Fund (ETF) managed by a SEBI- registered mutual fund, subject to a maximum of 5% of the paid-up unit capital of the REIT.	The Manager of the REIT shall, at least one trading day prior to such proposed transfer, announce the following details to the stock exchange(s) where its units are listed: i. the intention of the Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group to transfer units and the purpose of such transfer; ii. the details of Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group who propose to transfer their units in the REIT; iii. total number of units and percentage of unitholding proposed to be transferred; and iv. Details of the ETF to which units are proposed to be transferred by the Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group. The Manager of the REIT shall also give an undertaking to the recognized stock exchange(s) obtained from the Sponsor(s) / Manager/ and their associates/ related parties and Sponsor Group that they shall not subscribe to the units of such ETF to which units have been transferred by Sponsor(s) / Manager / and their associates/related parties and Sponsor Group entities for the purpose of MPS compliance.
9.	Any other method as may be approved by the Board on a case to case basis.	The Manager of the REIT shall approach the Board with an application containing relevant details to obtain prior permission. The Board would endeavour to communicate its decision within thirty days from the date of receipt of the proposal or the date of receipt of additional information as sought from the Manager of the REIT.

17.3. The Stock Exchange(s) shall monitor the methods adopted by REITs to increase their public unitholding and comply with minimum public unitholding requirements in terms of this circular. Non-compliance, if any, observed by the Stock Exchange(s) with respect to the method(s) and / or conditions prescribed herein, shall be reported to SEBI on a quarterly basis.

Annexures

Annexure – 1 .50

[see Chapter 2]

FORMATS OF DUE DILIGENCE CERTIFICATES

FORM A

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT

BANKER ALONG WITH DRAFT OFFER DOCUMENT

To,

Securities and Exchange Board of India
Dear Sirs,

Sub.: Public Issue of……………………….. by……………………………… (Name of the REIT)

We, the lead merchant banker(s) to the above mentioned forthcoming issue, state and confirm as follows:

(1) We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators, etc. and other material in connection with the finalization of the offer document pertaining to the said issue;

(2) On the basis of such examination and the discussions with the REIT, its Sponsor(s) and/or sponsor group and Manager, directors and other officers, other agencies, and independent verification of the statements concerning the terms of the issue, price justification and the contents of the documents and other papers furnished by the Manager, we confirm that:

(a) the draft offer document filed with the Board is in conformity with the documents, materials and papers relevant to the issue;

(b) all the legal requirements relating to the issue as also the regulations guidelines, instructions, etc. framed/issued by the Board, the Central Government and any other competent authority in this behalf have been duly complied with; and

(c) the disclosures made in the draft offer document are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed issue and such disclosures are in accordance with the requirements of the REIT Regulations, circulars, guidelines issued thereunder and other applicable legal requirements.

(3) We confirm that besides ourselves, all the intermediaries named in the draft offer document are registered with the Board and that till date such registration is valid.

(4) We have satisfied ourselves about the capability of the underwriters to fulfill their underwriting commitments, if any.

(5) We certify that written consent from sponsors and/or sponsor group has been obtained for inclusion of their units as part of sponsors and/or sponsor group contribution and for holding of the units for the specified period.

(6) We certify that the proposed activities of the REIT for which the funds are being raised in the present issue fall within the objectives of the Trust as specified in the Trust Deed of the REIT.

(7) We confirm that necessary arrangements have been made to ensure that the moneys received pursuant to the issue are kept in a separate bank account and that such moneys shall be released by the said bank only after permission is obtained from all the stock exchanges mentioned in the offer document. We further confirm that the agreement entered into between the bankers to the issue and the Manager on behalf of the REIT specifically contains this condition.

(8) We certify that the following disclosures have been made in the draft offer document:

(a) An undertaking from the Manager on behalf of the REIT that at any given time, there shall be only one denomination for the units of the REIT and

(b) An undertaking from the Manager on behalf of the REIT that it shall comply with such disclosure and accounting norms specified by the Board from time to time.

(9) We enclose a note explaining how the process of due diligence has been exercised by us with respect to the nature of the assets, the risk factors, net worth and experience of the sponsor/ manager, experience of the key personnel, etc.

(10) We enclose a checklist confirming regulation-wise compliance with the applicable provisions of the REIT Regulations, containing details such as the regulation number, its text, the status of compliance, page number of the draft offer document where the regulation has been complied with and our comments, if any.

(11) We enclose a checklist confirming clause-wise compliance with the guidelines for public offer issued under the REIT Regulations.

(12) We certify that profits from related party transactions have arisen from legitimate business transactions.

Place:

Date:

Merchant Banker(s) to the Issue

with Official Seal(s)

FORM B
FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT
BANKER AT THE TIME OF FILING OFFER DOCUMENT WITH THE BOARD AND
THE DESIGNATED STOCK EXCHANGE

To,

Securities and Exchange Board of India

Dear Sirs,

Sub.: Public Issue of……………………… by……………………………… (Name of the REIT)

(1) This is to certify that the offer document filed with the Board and Stock Exchanges has been suitably updated and that the said offer document contains all the material disclosures in respect of the REIT as on the said date.

(2) We confirm that the registrations of all the intermediaries named in the offer document are valid as on date and that none of these intermediaries have been debarred from functioning by any regulatory authority.

(3) We confirm that agreements have been entered into with both the depositories for dematerialisation of the units of the REIT.

Place:

Date:

Merchant Banker(s) to the Issue

with Official Seal(s)

FORM C

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT

BANKER IMMEDIATELY BEFORE OPENING OF THE ISSUE

To,

Securities and Exchange Board of India

Dear Sirs,

Sub.: Public Issue of……………………………. by……………………………. (Name of the REIT)

(1) This is to certify that all the material disclosures in respect of the REIT as on the date of opening of the issue have been made through the offer document filed with the Board and designated stock exchange and subsequent amendments/ advertisements (if applicable) dated (Details of advertisements to be enclosed), We confirm:

(a) that the registrations of all the intermediaries named in the offer document, are valid as on date and that none of these intermediaries have been debarred from functioning by any regulatory authority as on date.

(b) that the abridged version of the offer document contains all the disclosures as specified in the REIT Regulations and circulars thereunder.

Place:

Date:

Merchant Banker(s) to the Issue

with Official Seal(s)

FORM D

FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT

BANKER ALONG WITH FINAL POST ISSUE REPORT

To,

Securities and Exchange Board of India

Dear Sirs,

Sub.: Public issue of……………………………… by……………………………… (Name of REIT)

We, the under noted post issue lead merchant bankers to the abovementioned issue state as follows:

(1) We confirm that –

(a) For the units offered for lock-in, non-transferability details have been informed to the depositories;

(b) details of lock-in have been provided to all the stock exchanges on which units are to be listed, before the listing of the units.

(2) We certify that units included as minimum sponsors and/or sponsor group contribution and the units in excess of minimum sponsors and/or sponsor group contribution have been locked-in in terms of Regulation 11 of the REIT Regulations.

(3) We certify that provisions regarding lock-in of units held by persons other than sponsors have been duly complied with in accordance with REIT Regulations.

Place:

Date:

Merchant Banker(s) to the Issue

with Official Seal(s)

Notes:

1 Circular No. SEBI/HO/IMD/DF1/CIR/P/2017/83 dated July 24, 2017

2 Circular No. CIR/IMD/DF/136/2016 dated December 19, 2016

3 Circular No. SEBI/HO/DDHS/CIR/P/2019/15 dated January 15, 2019

4 Circular No. SEBI/HO/DDHS/CIR/P/2019/15 dated January 15, 2019

5 Circular No. SEBI/HO/DDHS/CIR/P/2019/15 dated January 15, 2019

6 Circular No. SEBI/HO/DDHS/CIR/P/2019/15 dated January 15, 2019

7 Circular No. SEBI/HO/DDHS/CIR/P/2019/15 dated January 15, 2019