Amendments to guidelines for preferential issue and institutional placement of units by a listed InvIT

Last updated: 30 September 2020

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The Securities and Exchange Board of India (SEBI) has issued amendments to the guidelines for Infrastructure Investment Trusts (InvITs) regarding the preferential issue and institutional placement of units. These changes, introduced in response to the COVID-19 pandemic, modify existing rules for raising equity capital. The amendments include adjustments to pricing methods for preferential issues made before December 31, 2020, and specify lock-in periods for allotted units.

Securities and Exchange Broad of India CIRCULAR SEBI/HO/DDHS/DDHS/CIR/P/2020/183 September 28, 2020 To All Infrastructure Investment Trusts (InvITs) All Parties to InvITs All Recognised Stock Exchanges All Merchant Bankers Madam/Sir Sub: Amendments to guidelines for preferent

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FAQ :

The circular amends the existing guidelines for preferential issue and institutional placement of units by listed InvITs, providing certain relaxations in light of the COVID-19 pandemic.

Yes, an InvIT shall not make any subsequent institutional placement until two weeks have passed from the date of a prior institutional placement made under special resolutions.

For preferential issues between the circular's date and December 31, 2020, InvITs can opt for a pricing method where the unit price is not less than the higher of the average weekly high/low VWAP over 12 weeks or the average weekly high/low VWAP over two weeks preceding the relevant date.

Units allotted on a preferential basis using the specified pricing method will be locked-in for a period of three years.

For computing the lock-in requirement, units previously held by sponsors and locked-in for three years under Regulation 12(3) of the InvIT Regulations will be taken into account. However, units already free of lock-in will not be subject to a fresh lock-in, even if considered for computation.