reit

SEBI rejigs norms for companies to raise funds via REIT, InvIT

Market regulator Securities And Exchange Board Of India has tweaked the norms for companies to raise funds via Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT). Firstly, the number of sponsors for REIT can now go up to 5 from the previous 2.

This will be very beneficial for the industry as everyone prefers to cut down risks, says Rajeev Talwar, Group Executive Director, DLF .

The Sebi also introduced a two layered structure where REITs will be able to invest in a holding company that has SPVs for real estate project. So after the change, a company need not go for any restructuring before opting for REIT, says Maadhav Poddar, Director – Tax and Regulatory Services, EY.

Hospitals & hotels are now considered real estate and have been brought under REIT.

Also, 20 percent of the REIT money can now be used for under construction projects compared to 10 percent earlier. This is a big positive, as infrastructure companies have most of their projects under construction and ther isn’t any inventory of finished projects, says Talwar.

These tweaks will be extremely investor friendly, says Jaynt Mhaiskar, MEP Infrastructure . He adds that money that can be raised via invit will increase significantly now.

With the easing of norms, a direct market access will be given to FPIs in the debt market. Earlier foreign investors had to go through Indian brokers.

Since FPIs can directly invest without intervention of Indian brokers, the cost of business will decrease and FPIs will be more interested to get into the direct market, says RS Loona, Partner, DV Alliance.


Source: moneycontrol.com

Leave a Reply

Your email address will not be published. Required fields are marked *

Post Navigation