Law on InvITs: Change in SEBI guidelines for achieving minimum public unitholding requirement
08 Nov 2023
- DMD Advocates
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Regulation 14(1A) of SEBI (Infrastructure Investment Trusts) Regulations, 2014 mandates all listed InvITs having public unitholding below 25% to increase its public unitholding to at least 25% within a period of 3 (three) years from the date of listing of units pursuant to initial offer.
SEBI has issued a circular dated October 31, 2023 introducing certain amendments.
a. Prior to the Amendment, the Master Circular for InvITs dated July 06, 2023, laid down 9 methods in order to facilitate achievement of such minimum public unitholding requirement. An additional method has been introduced to facilitate achievement of such minimum public unitholding requirement for privately placed InvITs through issuance of units through preferential allotment. However, this will be subject to the condition that only units issued to the public shall be considered for compliance with minimum unitholding requirement.
b. Moreover, modifications have been made to one of the existing methods for achieving the minimum public unitholding, i.e., sale of units held by Sponsor(s)/Investment Manager/Project Manager and their associates/related parties in the open market.