Sebi Permits Private Listed InvITs' OFS through Stock Exchange
Capital markets regulator Sebi has given approval for Offer For Sale (OFS) of units of private listed Infrastructure Investment Trusts (InvITs) through a stock exchange mechanism.
Capital markets regulator Sebi has given approval for Offer For Sale (OFS) of units of private listed Infrastructure Investment Trusts (InvITs) through a stock exchange mechanism. InvITs were introduced in India to allow investors to invest in infrastructure projects while spreading their risks through pooled arrangements.
Private InvITs can invest in assets that are still under construction, as well as completed and revenue-generating assets, whereas public InvITs mainly invest in completed and revenue-generating assets.
Based on feedback from market participants, Sebi has modified the framework to permit OFS for units of private listed InvITs, as mentioned in the circular issued by the Securities and Exchange Board of India.
The OFS is now allowed for the sale of units of Real Estate Investment Trusts (REITs) and InvITs by sponsor or sponsor group entities, as well as other unit holders in the listed REITs.
Regarding OFS for listed InvITs, the trading lot size will be the same as prescribed for such InvITs in the secondary market under Sebi's Infrastructure Investment Trusts rules.
Sebi stated that since retail investors are not involved in private listed InvITs, the provisions related to retail investors will not be applicable for OFS of such InvITs, and the OFS will only be open for one day.
The new framework is effective immediately.
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