SEBI tweaks guidelines on preferential allotment

Markets regulator Securities and Exchange Board of India has brought amendments in its framework pertaining to allotment of units by emerging investment vehicle InvIT on a preferential basis. The issue of units preferentially would not be made to any person who has either sold or transferred any units of the issuer during the six months period before the relevant date, the regulator said in a circular.

“Where any person belonging to sponsor(s) has sold/ transferred their units of the issuer during the six months preceding the relevant date, the sponsor(s) shall be ineligible for allotment of units on preferential basis,” SEBI added explaining the matter further.

In November 2019, SEBI had introduced certain guidelines for preferential issue as well as institutional placement of units by a listed real estate investment trust (REIT) and infrastructure investment trust (InvIT).

SEBI had notified REITs and InvIT Regulations for the first time in 2014, thus allowing the setting up and listing of such trusts which are popular in some advanced markets. However, to date, only a few InvITs and REITs have had their units listed in India despite various relaxations given by the markets regulator.