The Securities and Exchange Board of India (SEBI) has issued Frequently Asked Questions (FAQs) on the preferential issue of units by Infrastructure Investment Trusts (InvITs), providing clarity on eligibility, participation, pricing, lock-in, allotment, and listing requirements.
The following has been stated:
Preferential issue: A preferential issue means an issue of units by a listed InvIT to a select person or group of persons on a private placement basis, excluding public issue, rights issue, bonus issue and qualified institutions placement.
Eligibility and participation: An InvIT must obtain the requisite unitholder approval, ensure that the units have been listed for at least six months, obtain in-principle stock exchange approval and comply with applicable listing and disclosure requirements. Any person may participate, subject to the 90-trading-day restriction on persons who have sold or transferred InvIT units, with an exception where units are issued to a sponsor as full consideration for acquisition of its asset.
Pricing: For frequently traded units, the issue price cannot be lower than the higher of the 90-trading-day or 10-trading-day volume-weighted average price preceding the relevant date. For infrequently traded units, pricing must take into account the InvIT's NAV based on a full valuation of its assets.
Lock-in: Units allotted to persons other than sponsors and their associates are locked in for one year, while units allotted to sponsors and their associates are subject to a three-year lock-in for the prescribed portion. The entire pre-preferential issue holding of allottees is also subject to a six-month lock-in.
Allotment and listing: Allotment must generally be completed within 15 days of the unitholders' resolution, and the units must be listed within two working days of allotment. Delayed refunds attract 15% per annum interest.
Investor grievances: Investors may lodge complaints against InvITs or intermediaries involved in the allotment through SEBI's SCORES grievance redressal system.
