ISSUE OF UNITS AND ALLOTMENT :
– No initial offer of units by an InvIT shall be made unless,–
• The InvIT is registered with SEBI under these regulations;
• The value of the assets held by the InvIT is not less than rupees five hundred crore. Explanation- Such value shall mean the value of the specific portion of the holding of InvIT in the underlying assets or SPVs;
• The offer size is not less than rupees two hundred fifty crore.
However, the requirement of ownership of assets and offer size may be complied with after initial offer or first offer of units under private placement subject, to a binding agreement with the relevant party(ies) that the requirements shall be fulfilled prior to allotment of units, a declaration to SEBI and the designated stock exchanges to that effect, where applicable and adequate disclosures in this regard in the initial offer document or placement memorandum.
– If the InvIT invests or proposes to invest in under-construction projects, value of which is more than ten per cent of the value of the InvIT assets, it shall raise funds,–
• by way of private placement only through a placement memorandum;
• from qualified institutional buyers and body corporate only, whether Indian or foreign. In case of foreign investors, such investment shall be subject to guidelines as may be specified by RBI and the government from time to time;
• with minimum investment from any investor of rupees one crore;
• from not less than five and not more than one thousand investors.
– The InvIT as specified in above shall file the draft placement memorandum for making private placement of units with SEBI along with the application for registration and SEBI may communicate its comments, to such applicant which shall be incorporated by the applicant in placement memorandum prior to grant of registration.
– With respect to InvITs that hold not less than eighty per cent of its assets in completed and revenue generating infrastructure projects,–
• initial issue of units shall be by way of initial offer only;
• any subsequent issue of units after initial offer may be by way of follow-on offer, preferential allotment, qualified institutional placement, rights issue, bonus issue, offer for sale or any other mechanism and in the manner as may be specified by SEBI;
• minimum subscription from any investor in initial and follow-on offer shall be ten lakh rupees ;
• the units proposed to be offered to the public is not less than 25% of the total of the outstanding units of the InvIT and the units being offered by way of the offer document.
However, if prior to the initial offer, units of the InvIT are held by the public, the units proposed to be offered to the public shall be calculated after reducing such existing units for satisfying the aforesaid percentage requirement;
• prior to initial offer and follow-on offer, the investment manager shall file the draft offer document with the designated stock exchange(s) and SEBI not less than twenty one working days before filing the final offer document with the designated stock exchange;
• the draft offer document filed with SEBI shall be made public, for comments, if any, to be submitted to SEBI, within a period of at least ten days, by hosting it on the websites of SEBI, designated stock exchanges and merchant bankers associated with the issue;
• SEBI may communicate its comments to the lead merchant banker and, in the interest of investors, may require the lead merchant banker to carry out such modifications in the draft offer document as it deems fit;
• the lead merchant banker shall ensure that all comments received from SEBI on the draft offer document are suitably addressed prior to the filing of the final offer document with the designated stock exchanges;
• in case no modifications are suggested by SEBI in the draft offer document within twenty one working days from the date of receipt of satisfactory reply from the lead merchant bankers or manager, the InvIT may issue the final offer document or follow on offer document to the public;
• the draft and final offer document shall be accompanied by a due diligence certificate signed by the investment manager and lead merchant banker;
• the final offer document shall be filed with the designated stock exchanges and SEBI not less than five working days before opening of the offer and such filing with SEBI shall be accompanied by filing fees as prescribed in these regulations.
• The InvIT may make the initial offer or follow-on offer within a period of not more than six months from the date of last issuance of observations by SEBI, if any and if no observations have been issued by SEBI, within six months from the date of filing of final offer document with the designated stock exchanges. However, if the initial offer or follow-on offer is not made within the prescribed time period, a fresh offer document shall be filed;
• The InvIT may invite for subscriptions and allot units to any person, whether resident or foreign.
However, in case of foreign investors, such investment shall be subject to guidelines as may be specified by RBI and the government from time to time.
• the application for subscription shall be accompanied by a statement containing the abridged version of the offer document detailing the risk factors and summary of the terms of issue;
• initial offer and follow-on offer shall not be open for subscription for a period of more than thirty days;
• in case of over-subscriptions, the InvIT shall allot units to the applicants on a proportionate basis rounded off to the nearest integer subject to minimum subscription amount per subscriber as discussed above.
• the InvIT shall allot units or refund application money, as the case may be, within twelve working days from the date of closing of the issue;
• the InvIT shall issue units in only in dematerialized form to all the applicants;
• the price of InvIT units issued by way of public issue shall be determined through the book building process or any other process in accordance with the guidelines issued by SEBI and in the manner as may be specified by SEBI;
• the InvIT shall refund money,-
Note: – In case of Clause (b), right to retain such over subscription cannot exceed twenty five percent of the issue size.
• If the investment manager fails to allot or list the units or refund the money within the specified time, then the investment manager shall pay interest to the unit holders at the rate of fifteen per cent per annum, till such allotment or listing or refund and such interest shall be not be recovered in the form of fees or any other form payable to the investment manager by the InvIT;
• units may be offered for sale to public,–
(i) if such units have been held by the sellers for a period of at least one year prior to the filing of draft offer document with SEBI. The holding period for the equity shares or partnership interest in the SPV against which such units have been received shall be considered for the purpose of calculation of one year period referred in this sub-regulation.
(ii) subject to other guidelines as may be specified by SEBI in this regard;
– If the InvIT fails to make any offer of its units, whether by way of public issue or private placement, within three years from the date of registration with SEBI, it shall surrender its certificate of registration to SEBI and cease to operate as an InvIT.
However, SEBI, if it deems fit, may extend the period by another one year. Further that the InvIT may later re-apply for registration, if it so desires.
– SEBI may specify by issue of guidelines or circulars any other requirements, as it deems fit, pertaining to issue and allotment of units by an InvIT, whether by way of public issue or private placement.