(1) A REIT shall make an initial offer of its units by way of public issue only.
(2) No initial offer of units by the REIT shall be made unless,-
(a) the REIT is registered with the Board under these regulations;
(b) the value of 93[the REIT assets] is not less than five hundred crore rupees;
Explanation.- Such value shall mean the value of the specific portion of the holding of REIT in the underlying assets or 94[] SPVs;
95[(ba) the minimum number of unit holders other than sponsor(s), its related parties and its associates forming part of public shall be not less than two hundred;]
(c) 96[***] 92 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 93 Substituted for “all the assets owned by REIT” by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2018, w.e.f. 10.04.2018.
94 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 95 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 96 Omitted, by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016.
Prior to its omission, sub- clause (c) read as under :
“the units proposed to be offered to the public is not less than twenty five per cent. of the total of the outstanding units of the REIT and the units being offered by way of the offer document:
Provided that for initial offer of value greater than five hundred crore rupees, if prior to the initial offer units of the REIT 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;” 27
(d) the offer size is not less than two hundred and fifty crore rupees:
Provided that the requirement of ownership of assets under clause (b) and size of REIT under clause (d) may be complied 97[at any point of time before allotment of units in accordance with offer document/placement memorandum] subject to a binding agreement with the relevant party(ies) that 98[such] requirements shall be fulfilled prior to 99[such] allotment of units100[and], a declaration to the Board and 101[to] the designated stock exchanges to that effect and adequate disclosures in this regard in the 102[***] offer document.
103[(2A) For an REIT raising funds through an initial offer, the units proposed to be offered to the public through such initial offer
(a) shall be not less than twenty five per cent. of the total of the outstanding units of the REIT and the units being offered by way of the offer document, if the post issue capital of the REIT calculated at offer price is less than rupees one thousand six hundred crore:
Provided that the requirement at sub-clause (a) shall be complied along with the requirement under Regulation 14 (2)(d) of the REIT Regulations.
(b) shall be of the value of at least Rs 400 crore, if the post issue capital of the REIT calculated at offer price is equal to or more than rupees one thousand six hundred crore and less than rupees four thousand crore;
(c) shall be not less than ten per cent. of the total of the outstanding units of the REIT and the units being offered by way of the offer document, if the post issue capital of the REIT calculated at offer price is equal to or more than rupees four thousand crore:
Provided that any units offered to sponsor or the manager or their related parties or their associates shall not be counted towards units offered to the public:
97 Substituted for “with after initial offer” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 98 Substituted for “the” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 99 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 100 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 101 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 102 Omitted “initial” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 103 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 28
Provided further that any listed REIT which has public holding below twenty five per cent on account of sub-clauses (ii) and (iii) above, such REIT shall increase its public holding to at least twenty five per cent, within a period of three years from the date of listing pursuant to initial offer.]
(3) Any subsequent issue of units by the REIT 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 the Board.
(4) REIT, through the 104[merchant banker], shall file a draft offer document 105[along with the fee as specified in Schedule II,] with the designated stock exchange(s) and the Board, not less than 106[thirty] working days before filing the 107[***] offer document with the designated stock exchange 108[and the Board].
(5) The draft offer document filed with the Board shall be made public, for comments, if any, 109[***] by hosting it on the websites of the Board, designated stock exchanges and merchant bankers associated with the issue 110[, for a period of not less than twenty one days].
(6) The 111[draft offer document and/ or offer document] shall be accompanied by a due diligence certificate signed by the 112[***] lead merchant banker.
(7) The Board 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.
(8) The lead merchant banker shall ensure that all comments received from the Board on the draft offer document are suitably taken into account prior to the filing of the offer document with the designated stock exchanges.
104 Substituted for “manager” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 105 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 106 Substituted for “twenty one” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 107 Omitted “final” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 108 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 109 Omitted “to be submitted to the Board, within a period of at least ten days,” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 110 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 111 Substituted for “draft and final offer document” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 112 Omitted “Manager and” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 29
(9) In case no 113[observations] are 114[issued] by the Board 115[on] 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 REIT may 116[file] the 117[***] offer document or follow-on offer document 118[with the Board and the exchange(s)]:
119[***]
(10) The 120[***] offer document shall be filed with the designated stock exchanges and the Board not less than five working days before opening of the offer 121[***].
(11) The initial offer or follow-on offer 122[or rights issue] shall be made by the REIT within a period of not more than 123[one year] from the date of 124[***] issuance of observations by the Board 125[***]:
Provided that if the initial offer or follow-on offer 126[or rights issue] is not made within the specified time period, a fresh 127[draft] offer document shall be filed.
(12) The REIT may invite for subscriptions and allot units to any person, whether resident or foreign:
113 Substituted for “modifications” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 114 Substituted for “suggested” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 115 Substituted for “in” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 116 Substituted for “issue” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 117 Omitted “final” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 118 Substituted for “to the public” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 119 Omitted “Provided that prior to issue of such final offer document, it shall be filed with the designated stock exchanges and with the Board.” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 120 Omitted “final” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 121 Omitted “and such filing with the Board shall be accompanied by filing fees as specified under Schedule II” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 122 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 123 Substituted for “six months” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 124 Omitted “last” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 125 Omitted “, if any or if no observations have been issued by the Board, within a period of not more than six months from the date of filing of offer document with the designated stock exchanges” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 126 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 127 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 30
Provided that in case of foreign investors, such investment shall be subject to guidelines as may be specified by Reserve Bank of India and the government from time to time.
(13) 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.
128[(14) The minimum subscription from any investor in initial and/or public offer shall be rupees fifty thousand.]
(15) Initial offer and follow-on offer shall not be open for subscription for a period of more than thirty days.
(16) In case of over-subscriptions, the REIT shall allot units to the applicants on a proportionate basis rounded off to the nearest integer subject to minimum subscription amount per subscriber as specified in sub-regulation (14).
(17) The REIT shall allot units or refund application money, as the case may be, within twelve working days from the date of closing of the issue.
(18) The REIT shall issue units only in dematerialized form to all the applicants.
(19) The price of REIT units issued by way of public issue shall be determined through the book building process or any other process in accordance with the circulars or guidelines issued by the Board and in the manner as may be specified by the Board.
(20) The REIT shall refund money, -
(a) to all applicants in case it fails to collect subscription amount of exceeding 129[ninety] per cent. of the 130[fresh] issue size as specified in the 131[***] offer document 132[***];
128 Substituted by the Securities and Exchange Board of India (Real Estate Investment Trusts) (Amendment) Regulations, 2019, w.e.f. 22.4.2019. Prior to the substitution, sub-regulation 14 read as follows:
“(14) Under both the initial offer and follow-on public offer, the REIT shall not accept subscription of an amount less than two lakh rupees from an applicant.” 129 Substituted for “seventy five” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 130 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 131 Omitted “initial” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f.
30.11.2016 132 Omitted “or follow-on offer document” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 31
(b) to applicants to the extent of oversubscription in case the moneys received is in excess of the extent of over-subscription as specified in the 133[***] offer document:
Provided that right to retain such over subscription cannot exceed twenty five per cent. of the issue size;
134[Provided further, that the offer document shall contain adequate disclosures towards the utilisation of such oversubscription proceeds, if any, and such proceeds retained on account of oversubscription shall not be utilised towards general purposes.]
(c) to all applicants in case the number of subscribers to the initial offer forming part of the public is less than two hundred.
(21) If the manager fails to allot, or list the units, or refund the money within the specified time, then the manager shall pay interest to the unit holders at fifteen per cent. per annum, till such allotment/ listing/refund and such interest shall not be recovered in the form of fees or any other form payable to the manager by the REIT.
(22) Units may be offered for sale to public,-
(a) if such units have been held by the existing unitholders for a period of at least one year prior to the filing of draft offer document with the Board:
Provided that the holding period for the equity shares 135[, compulsorily convertible securities (from the date such securities are fully paid-up)] or partnership interest in the 136[holdco and/or] SPV against which such units have been received shall be considered for the purpose of calculation of one year period referred in this subregulation:
137[Provided further that the compulsorily convertible securities, whose holding period has been included for the purpose of calculation for offer for sale, shall be converted to equity shares of the holdco or SPV, prior to filing of offer document.]
133 Omitted “initial offer document or follow-on” by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 134 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 135 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017 136 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2016, w.e.f. 30.11.2016 137 Inserted by the SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2017, w.e.f. 15.12.2017 32
(b) subject to other circulars or guidelines as may be specified by the Board in this regard.
138[(22A) The amount for general purposes, as mentioned in objects of the issue in the draft offer document filed with the Board, shall not exceed Ten per cent of the amount raised by the REIT by issuance of units.]
(23) If the REIT fails to make its initial offer within three years from the date of registration with the Board, it shall surrender its certificate of registration to the Board and cease to operate as a REIT:
Provided that the Board, if it deems fit, may extend the period by another one year:
Provided further that the REIT may later re-apply for registration, if it so desires.
(24) The Board may specify by issue of guidelines or circulars any other requirements, as it deems fit, pertaining to issue and allotment of units by a REIT.
Offer document and advertisements.