The key conditions prescribed by SEBI, by way of circular dated November 27, 2019, under the guidelines for preferential issue and institutional placement of units of Real Estate Investment Trusts (‘REITs’) and Infrastructure Investment Trusts (‘InvITs’), are as follows:

i.       No promoter, partner or director of the sponsor(s) or investment manager or trustee of the REIT or InvIT should have been declared as a fugitive economic offender.

ii.       New units can be issued to a maximum of 200 investors in a financial year, excluding institutional investors.

iii.     While seeking unitholder approval for preferential issue of units, the explanatory statement should disclosure the 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. However, 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 change of ownership of the proposed allottee, no further disclosure will be necessary.

iv.      Under preferential issue of units, the units allotted to sponsor(s) of the REIT / InvIT has to be locked-in for 3 years, and the units allotted to persons other than the sponsor(s) has to be locked-in for 1 year from the date of trading approval for such units. The entire pre-preferential issue unitholding of the allottees has to be locked-in from the relevant date up to a period of 6 months from the date of trading approval. Under institutional placement of units, the units allotted are locked-in for a period of 1 year from the date of allotment, except on a recognised stock exchange.