Deconstructing InvITs REITs NEW 11 Oct PDF

De’constructing InvITs and REITs
2nd Edition
De’constructing InvITs and REITs
2nd Edition
TABLE OF CONTENTS
A Foreword To e Second Edition

B Foreword To e First Edition
C Infrastructure Investment Trusts

I Introduction
II Public Offerings by InvITs
III Parties and Intermediaries to an InvIT
IV Transaction Documents
V Process for Issue and for Listing
VI Disclosure Requirements
VII Corporate Actions
VIII Certain Post-Issue Considerations
IX Publicity and Research
X Prefrential Issue of Units
XI Offerings by Unlisted InvITs through Private Placements
XII Glossary
D Real Estate Investment Trusts

I Introduction
II Offerings by REITs
III Parties and Intermediaries to a REIT
IV Transaction Documents
V Process for Issue and for Listing
VI Disclosure Requirements
VII Corporate Actions
VIII Certain Post-Issue Considerations
IX Publicity and Research
X Issue of Debt Securities
XI Glossary
A. FOREWORD TO THE SECOND EDITION
e period since the release of the first investment option for long term pools of
edition of our handbook (in January 2017) capital, providing an alternative avenue for
has been marked by important changes in investment in infrastructure and real estate
relation to InvITs (the Indian equivalent of a and providing an option to relieve the stress
business trust) and REITs in India. On the on the banking sector, the InvIT Regulations
commercial front, two InvITs have listed and the REIT Regulations were notified.
through the public offer route, three InvITs Furthering this agenda, on the legal and
have listed through the private placement regulatory front, the government and various
route, the first REIT has been listed, and regulators (in addition to SEBI and RBI)
quite recently, the first PIPE deal by one ohe have put in place important and positive
listed InvITs has concluded, which would changes to ensure the success of InvITs and
also amongst other things ultimately, likely REITs. Pursuant to such changes, various
result in the change of control of the persons resident outside India, domestic
investment manager. ese changes have financial investors (such as, insurance
acted as catalysts for the growth of InvITs and companies, SCBs, FPIs, pension funds and
REITs. However, it is important to note that provident funds) can now invest in units of
such changes have also, in some measure, InvITs and REITs; InvITs and REITs can now
been due to the acceptance and appreciation issue debt securities (including, ECBs and
of InvITs and REITs as optimum and efficient Masala Bonds); InvITs can leverage up to
options for financing two of the most 70%, subject to compliance with certain
important sectors of the Indian economy – conditions; and listed InvITs can now raise
infrastructure and real estate. further equity capital through a preferential
issue of units. Recently, the Minister of
In line with the agenda of SEBI, which Finance while presenting the Union Budget
included attracting international finance into has indicated that FPIs will be permitted to
Indian infrastructure, creating a popular subscribe to listed debt securities issued by
De’constructing InvITs and REITs 001

InvITs and REITs. Changes to law to reflect We expect more interesting developments
this are awaited. in the coming years. Other than the
standard fare, India may just have trusts
Efforts to make these units available for retail holding a more eclectic portfolio of assets
participation has been in right earnest by including warehouses, infrastructure for
SEBI with the reduction in the bidding and educational institutions, hotels, hospitals
trading lots for public offers of units by and renewable energy assets. With further
InvITs and REITs. clarity on the regulatory framework, a variety
We believe that certain other changes would of transactions may be undertaken by listed
make InvITs and REITs an even more InvITs and REITs, including buy-backs, open
popular option for long term investing offers and de-listing. One can also expect
including allowing two-level holding some developments regarding migration of
structures to avail dividend distribution tax InvITs listed through the private placement
exemption and better returns to investors. route towards enabling participation by non-
While InvITs and REITs can avail debt institutional and retail investors. Another
(including, by raising ECBs and issuing debt positive factor in further developing these
securities), SCBs are restricted from granting products is the likely increase in investor
loans to InvITs and REITs. Also, other than participation and therefore, trading ,
the preferential issue of units by listed InvITs buttressed by consistent distributions by
for which guidelines have been notified by listed InvITs and REITs. InvITs may also
SEBI, the regulatory framework for other increase M&A activity in some of the
modes of raising further equity capital (such infrastructure sectors (such as, roads and
as, FPO, rights issue and QIP) are yet to be highways and renewable energy) due to
notified by SEBI. ere is also the important pro g ressive emerg enc e of InvI Ts a s
and challeng ing problem of limited infrastructure investment platforms (as
understanding amongst various investor much as infrastructure financing options)
categories about the nature (and therefore, and as listed InvITs aim to increase their
the performance) of units of InvITs and AUMs and yield through value accretive
REITs, lack of trading volumes in listed units third-party acquisitions. With the challenges
and limits on investments by DFIs for whom being faced by some of the existing
investment in units of InvITs and REITs is an infrastructure developers and increased focus
optimum investment option due to the in divesting non-core businesses, the
yielding nature of such units. Considering infrastructure sector will be dependent on
the support and encouragement provided InvITs to address some of these concerns. e
thus far by SEBI and other regulatory and day is not far when InvITs and REITs start
governmental authorities to ensure the bidding for infrastructure assets or real estate
success of InvITs and REITs we believe that, assets that are undergoing corporate
by addressing some of these commercial and insolvency resolution process under the
practical challenges, one can assume that the Insolvency and Bankruptcy Code, 2016.
issues highlighted above would be addressed.
002 De’constructing InvITs and REITs

erefore, even though a lot has been We hope you enjoy reading this handbook.
achieved to ensure the success of InvITs We also hope to receive your feedback on this
and REITs during the last few years, the handbook.
path ahead is likely to be very exciting for
various stakeholders in InvITs and REITs. September, 2019
is is expected to be a relatively safer avenue
for investment by different classes of
investors in India and see more and more
investment resulting in quality, long-term
portfolios with high standards of corporate
governance and healthy and regular returns.
is will hopefully reduce the large amounts
of debt on corporate India’s balance sheets.
While we expect legal and regulatory

changes, jurisprudential developments and
establishment of norms or precedents in the
context of InvITs and REITs, there are
certain aspects that are likely to remain
constant. We aim to present, through this
handbook, a primer on fundamental aspects
and to address frequently asked questions
related to the setting-up and listing of InvITs
and REITs.
NOTE: All information given in this handbook has been compiled om credible and reliable sources.
Although reasonable care has been taken to ensure that the information in this handbook is true and
accurate, such information is provided ‘as is’, without any warranty, express or implied as to the
accuracy or completeness of any such information. Cyril Amarchand Mangaldas shall not be liable for
any losses incurred by any person om any use of this publication or its contents. is handbook does
not constitute legal or any other form of advice om Cyril Amarchand Mangaldas. Readers should
consult their legal, tax and other advisors before making any investment or other decision with regard
to any business in India.

B. FOREWORD TO THE FIRST EDITION
India’s position as one of the fastest growing financial crisis, and its sustained ability to
economies in the world is undisputed today. attract global investments has been the
Infrastructure and real estate are two dynamic regulatory regime ushered in aer
important sectors that underpin sustained the economic liberalization process which
economic growth and development, and started in 1991. Introduction of InvITs
have critical importance for India’s growth and REITs is a testimony to that dynamic
both on economic and social parameters. e regulatory regime. It could not have been
importance of these two sectors is also introduced at a more opportune time as it
evident from experience - the 2008 financial comes in the backdrop of increased focus on
crisis triggered primarily by stagnation or infrastructure and real estate development
deceleration of real estate sector in the US is a and increased challenges for financing that.
recent case in point. However, these two Historically, banks and financial institutions
sectors also need significant impetus from have been primarily saddled with the
the g overnment, perhaps more than responsibility of financing these sectors.
others, for sustained growth and orderly Lately, though, both these sectors have been
development and the reasons for that are not attracting private sources of financing, such
far to seek. ere are inherent barriers to as private equity investments in project SPVs.
growth of these sectors (such as high cost of InvITs and REITs provide an opportunity to
development, long gestation periods and participate in infrastructure and real estate
illiquid nature of assets), which can be financing through a stable and liquid
overcome only through constant innovation, instrument and also encourages better
both technical and financial, and governance structures. It also provides
government support. smaller and non-institutional investors an
opportunity to participate in infrastructure
A part of the reason for continued growth of
and real estate financing and reap the benefits
Indian economy, even in the midst of global

of growth in these sectors, through a legal areas, such as general corporate, real
marketable instrument, which is less prone to estate or infrastructure (or in most cases,
vicissitudes of speculation and volatility both), tax, competition law, and last but
inherent in equity investments. definitely not the least, capital markets.
Additionally, we had the opportunity to
InvITs and REITs would also enable
interact with regulators (such as Monetary
internalization of capital raising. In the last
Authority of Singapore and Singapore
few years, many infrastructure and real estate
Exchange), which enabled us to gain a
companies had evinced interest in listing of
perspective of experienced regulators on such
similar products in overseas jurisdictions,
products. is also helped us ain providing
which had established regulatory regime
incisive inputs during multiple rounds of
for business trusts and REITs (such as
consultative process initiated by SEBI. Our
Singapore) – some succeeded in achieving
firm and partners have invested significant
listing, many did not. Low success rate of
time and resources in engaging with various
such listings by Indian companies in overseas
stakeholders, such as regulators, prospective
jurisdictions can be attributed to two key
issuers and other advisors to help in achieving
reasons - a high cost of capital and regulatory
an optimum regulatory regime for InvITs and
expense. With introduction of InvITs and
REITs.
REITs, Indian capital markets have overcome
the competitive disadvantage on that front It would be remiss to conclude any discussion
and provided Indian companies with a much about InvITs and REITs without high-
needed additional avenue for financing. lighting the stellar role that the government
However, the experience garnered while and SEBI played in making InvITs and REITs
undertaking listing of business trusts and a reality. e government has provided a
REITs in Singapore has held all stakeholders, largely favourable tax regime and liberalized
including corporates and advisors, in good the ability to invest in InvITs and REITs. e
stead. Fortunately, our firm and various consultative process that SEBI initiated on
partners were at the epicenter of many of regulatory regime governing InvITs and
these transactions, which has enabled us to REITs provided an opportunity to all
have profound understanding of this product stakeholders to highlight any practical
and makes us very well placed to advise challenges and provide suggestions that
prospective sponsors of InvITs and REITs. As would make InvITs and REITs an attractive
an illustration, our firm acted as the Indian investment option. SEBI has considered such
legal adviser to Fortis Healthcare Limited suggestions favourably, without losing sight
and the trustee-manager in the listing of of its most important aim – protecting
Religare Health Trust. Our legal acumen was investors’ interest.
tested to the fore in overcoming multiple
2016 can be considered a watershed year for
legal challenges, which largely emanate from
InvITs and REITs – it witnessed significant
such transactions straddling across many
regulatory changes and registration of six

InvITs and application for registration of one We present this handbook to enable readers
REIT. Our firm has been fortunate to act as to comprehend the basics of the systems,
legal advisors for the REIT and three of the procedures and rules that are essential for
InvITs, including India Grid Trust (with entities seeking to list InvITs and REITs. is
Sterlite Power Grid Ventures Limited) which handbook has been updated until December
has filed its Dra Offer Document for an 31, 2016. Some of the regulations may be
IPO. On the regulatory front, SEBI issued subject to further change.
several consultation papers for comments
from the public and subsequently, amended January, 2017
the Securities and Exchange Board of
India (Infrastructure Investment Trusts)
Regulations, 2014 and the Securities and
Exchange Board of India (Real Estate
Investment Trusts) Regulations, 2014 to
introduce several key changes and further
streamline these regulations, aligning them
with the requirements and challenges of the
specific industry sectors, while continuing to
make these financial products attractive to
investors. SEBI has also introduced a
framework for corporate governance norms
and disclosure standards for both InvITs and
REITs.
NOTE: All information given in this handbook has been compiled om credible and reliable sources.
Although reasonable care has been taken to ensure that the information in this handbook is true and
accurate, such information is provided ‘as is’, without any warranty, express or implied as to the
accuracy or completeness of any such information. Cyril Amarchand Mangaldas shall not be liable for
any losses incurred by any person om any use of this publication or its contents. is handbook does
not constitute legal or any other form of advice om Cyril Amarchand Mangaldas. Readers should
consult their legal, tax and other advisors before making any investment or other decision with regard
to any business in India.

C. INFRASTRUCTURE
INVESTMENT TRUST
I. Introduction
01 What is an InvIT?
An infrastructure investment trust is a trust For the purposes of the InvIT Regulations,
formed under the Trusts Act and registered “ Inf r a str u c t ure ” in c l u d e s a l l th e
under the Registration Act. In accordance infrastructure sub-sectors specified in the
with the Trusts Act, a trust is an obligation Harmonised Master List of Infrastructure
attached to the ownership of property. e Sub-sectors dated November 14, 2017 issued
obligation is created by the author of the by the Ministry of Finance, available at
trust, accepted by the owner of property and http://egazette.nic.in/WriteReadData/201
owed to the beneficiaries identified in the 7/180317.pdf and updated from time to
Trust Deed. In the context of an InvIT, the time. Such infrastructure sub-sectors include
trust is created by the Sponsor, the ownership roads and bridges, ports, airports, metros,
of the property vests in the Trustee and the electricity generation, transmission or
beneficiaries of the trust are the Unitholders distribution, telecommunication services,
of the InvIT. telecommu-nication towers, capital stock of
hospitals and educational institutions,
An InvIT can only invest in Holders or SPVs, certain categories of hotels and convention
infrastructure projects or securities in India centres and common infrastructure for
within the framework provided under the industrial parks or other parks with
InvIT Regulations and the investment industrial activity (such as, special economic
strategy of the InvIT. zones).
02 What are the key laws applicable to InvITs?

e key laws applicable to InvITs include the
InvI T R e g u l a t i o n s , t h e InvI T, t h e
Preferential Issue Guidelines, the Allotment
and Trading Lot Guidelines, the Trusts Act,
the Registration Act and the Income Tax Act,
1961, the Foreign Exchange Management
Act, 1999 and the FEMA Regulations.
03 Who are the parties involved in

the establishment of an InvIT?
e parties involved in the establishment
of an InvIT are the Sponsor, the Trustee,
the Investment Manager and the Project
Manager, each with distinct duties, roles and
responsibilities.

04 What is a project SPV/ a Holdco?
A Project SPV may be a company or an LLP Manager, in consultation with the Trustee,
in which either the InvIT or the Holdco (as should appoint majority of the board of
defined below) holds or proposes to hold directors or governing boards of the Project
controlling interest and not less than 51% of SPVs, as may be applicable.
the equity share capital or interest. However,
in case of PPP Projects where such acquiring A Holdco may be a company or an LLP (I)
or holding is disallowed by government or in which the InvIT holds or proposes to hold
regulatory provisions under the concession controlling interest and not less than 51%
agreement or such other agreement, this of the equity share capital or interest and
clause shall not apply and shall be subject to which in turn has made investments in
provisions of the InvIT Regulations. It also other Project SPVs, which ultimately hold
includes a company or an LLP in (i) which the infrastructure assets; and (ii) which is
hold not less than 99% of its assets directly in not engaged in any other activity other than
infrastructure projects and does not invest in holding of the underlying Project SPVs,
other Project SPVs; and (ii) which is not holding of infrastructure projects and any
engaged in any other activity other than other activities pertaining to and incidental
activities pertaining to and incidental to the to such holdings.
underlying infrastructure projects. An InvIT may invest in infrastructure
An InvIT may invest in infrastructure projects through a Holdco subject to certain
projects through a Project SPV subject to investment restrictions, including (i) the
certain investment restrictions, including (i) holding interest of the InvIT in the Project
the partner or shareholder of the Project SPV SPV(s) should be at least 26%; and (ii) the
should not have any rights which may Investment Manager, in consultation with
prevent the InvIT from complying with the the Trustee, should appoint majority of the
InvIT Regulations; and (ii) the Investment board of directors or governing boards of the
Project SPVs, as may be applicable.
05 Who are the various intermediaries involved in an InvIT?

e following are the intermediaries that are least one of them shall be the lead
appointed for an Issue for the purposes of Merchant Banker for the Issue of
listing of the Units of an InvIT: Units of InvITs, which entity shall be
the Merchant Banker to the Issue.
(i) Merchant Bankers e InvIT shall be permitted to
e Investment Mana g er, in file the Dra Offer Document or the
consultation with the Trustee, is Placement Memorandum, as the case
required to appoint at least one or more may be, only through a Merchant
Merchant Bankers, registered under the Banker.
Merchant Bankers Regulations, and at

e Merchant Bankers are expected to (ii) Registrar to the Issue
exercise due diligence and in respect of a e Registrar to the Issue, an entity
public issue, the Merchant Bankers are registered with SEBI, is required to
required to file a due dilig ence accept application form from investors
certificate along with a copy of the Dra in the Issue and process application
Offer Document, Offer Document at forms from Syndicate Members of
the time of opening of the Issue and at SCSBs and co-ordinate the process for
the time of submission of the final Issue allotment of Units of the InvIT and
report with SEBI. In respect of a refund the subscription amount where
private placement, the Merchant the Units are not allotted to the
Bankers are required to file a due applicant. e Registrar is also required
diligence certificate along with a copy of to accurately maintain physical and
the Placement Memorandum. Further, electronic bid data for bids received,
the Merchant Bankers advise the including maintaining a record of
InvIT and Parties to the InvIT on application forms received. A Registrar
appointment of other intermediaries. to the Issue may be appointed in a
private placement.
e Merchant Bankers interact with
S E B I a n d th e s t o c k e xc ha n g e s (iii) Syndicate Members
throug hout the listing pro cess,
including obtaining final observations Syndicate Members collect application
and receiving in-principle and final forms from applicants during the Issue
listing approvals from the stock period, and enter details into the
exchanges. e Merchant Bankers also electronic bidding system on the stock
assist with co-ordinating road shows for exchanges and undertake preliminary
marketing of the Issue for public offers. verification prior to sending the
application forms to the Registrar to the
e Merchant Bankers also have Issue.
certain post-Issue obligations such as
filing of monitoring reports with (iv) Public Issue Banks
SEBI, redressal of investor grievances Public Issue Banks are banks with
including those in relation to refund, whom the public offer accounts are
allotments, dispatches and payment of opened for the collection of application
interest to applicants. money received from investors.
Public Issue Banks would typically not

be required in a private placement.
(v) Escrow Collection Banks

An Escrow Collection Bank acts as an
escrow ag ent in relation to the
application money received as a part of

the public issue from non-ASBA c o l le ct app l ication forms from
investors. e escrow account is opened applicants during the Issue period, and
for collecting the application money enter details into the electronic bidding
received from non-ASBA investors. An system on the stock exchanges and
Escrow Collection Bank also handles undertake preliminary verification
refunds of excess amount received from prior to sending the application forms
non-ASBA investors. to the Registrar to the Issue. SCSBs
or Registered Brokers or Registrar
(vi) Credit Rating Agencies and Share Transfer Agents or
A Credit Rating Agency is responsible Collecting Depository Participants
for assigning credit rating to the would typically not be required in a
Units of the InvIT, in such manner as private placement.
may be prescribed by the InvIT
Regulations. Further, in terms of the (viii) Advertising agency
InvIT Regulations, credit rating is In respect of a public issue, an
mandatorily required to be obtained advertising agency is responsible for
from a Credit Rating Agency if the advertising and publicity, undertaking
aggregate consolidated borrowings and public relation activities and providing
deferred payments of the InvIT exceed information to the Merchant Bankers
25% of the value of the InvIT Assets. t o e na b l e th e m t o s u b m i t th e
compliance certificate to SEBI as
(vii) SCSBs, Registered Brokers, RTAs and specified under the InvIT Guidelines.
CDPs
However, in terms of the InvIT
SCSBs or Registered Brokers or
Regulations, no advertisements may be
Registrar and Share Transfer Agents or
issued in case of a private placement.
Collecting Depository Participants

06 What is the typical structure of an InvIT?
Provided below is the typical structure of an InvIT:
Sponsor Unitholders
Distributions
Distributions
Investment Management Fees

Trustee Fees
Investment
Manager Trustee
Investment Management InvIT Trust Deed

Agreement
Project Implementation and

Management Agreement
Infuse capital to
Project Management replace debt
Fees
Income
Project Manager
Holdco
SPV SPV
SPV
07 What is the process for registration of an InvIT?

Provided below are the steps involved in • Identification of the Investment
registration of an InvIT: Manager and the Project Manager
• Identification and appointment of the • Submission of the application to SEBI

Trustee by the Sponsor by the Sponsor for registration of the
InvIT in the manner specified under
• Formation of a trust under the Trusts Schedule I, Form A of the InvIT
Act and registration of the same under Regulations along with the executed
the Registration Act, by the Sponsor versions of the Trust Deed and the

Investment Management Agreement. • Review of application by SEBI, addressing
Some of the key information to be queries by SEBI in the application and
included in the application is (i) details incorporating comments, if any, by SEBI
of the parties to the InvIT; ( ii) on the Trust Deed and the Investment
description of assets to be included Management Agreement
under the InvIT; (iii) details of the
business plan and investment strategy; • Grant of in-principle approval by SEBI for
and (iv) details of disciplinary action registration of the InvIT
and litigation connected with securities • Submission of non-refundable application
market if any, against the Parties to the fee to SEBI
InvIT and each of their directors
including refusal of registration or • Grant of final registration certificate as an
suspension of registration by SEBI. InvIT by SEBI
07 When is the Sponsor required to transfer infrastructure assets to the

InvIT?
e Sponsor is required to transfer its entire
shareholding or interest and rights in the
infrastructure assets (which constitute the
initial portfolio assets of the InvIT) to the
InvIT prior to allotment of Units of the
InvIT through private placement or public
issue for the listing of Units.

II. Public Offerings
by InvITs
01 Is there a mandatory listing requirement under the InvIT Regulations?
Yes, an InvIT is required to list its Units fit, it may grant an extension of one year.
under the InvIT Regulations. Under the
extant InvIT Regulations, if an InvIT fails to SEBI has recently introduced the concept of
offer its Units (either through a public issue a private unlisted InvIT which may
or a private placement) within three years undertake an issuance of unlisted units
from the date of registration of the InvIT through a private placement.
with SEBI, it is required to surrender its
certificate of registration and should cease to
operate as an InvIT. However, if SEBI deems
02 What are the various types of Units’ offerings that can be undertaken
by an InvIT?
An InvIT can undertake listing through public issue; (b) a preferential allotment; (c) a
either an initial public issue or a private qualified institutions placement; (d) a rights
placement of its Units. An InvIT can also Issue; and (e) a bonus Issue; and (f ) offer for
undertake an offering of Units without sale or any other mechanism specified by
listing of Units on a private placement basis SEBI. However, other than for a preferential
and subject to certain conditions. e issue, the extant InvIT Regulations do not
minimum size of such offerings should be ` provide the operational rules or guidelines
2,500 million. for undertaking such offerings of Units by an
InvIT.
A listed InvIT can undertake the following
types of offerings of its Units: (a) a follow-on
03 What are the basic requirements for undertaking a public issue or a

private placement for listing of Units by an InvIT?
An InvIT is eligible to undertake a public holding of InvIT in the underlying assets) is

issue or a private placement for listing of its at least `5,000 million. Moreover, the issue
Units only if the value of the assets size of the public issue or private placement
comprising initial portfolio of assets of the should be at least `2,500 million.
InvIT, (being the value of the portion of the

04 What constitutes a public issue of Units by an InvIT ? What are the
eligibility requirements and other important conditions applicable
to a public issue of Units by an InvIT?
A public issue of Units by an InvIT is an offer (a) Minimum 80% of the value of the InvIT
of Units in which any person eligible to invest Assets shall be invested in completed
can participate and is not restricted to and revenue generating infrastructure
participation by Institutional Investors and projects; and
Bodies Corporate only. Further, any offer to
more than 1,000 persons (even if restricted to (b) Maximum 20% of the value of the
QIBs and Bodies Corporate) shall constitute InvIT Assets shall be invested in other
a public issue. A public issue can only be e l i g i b l e i nv e s tm e nt s i n c l u d i n g
undertaken by an InvIT that complies with investments in under-construction
the following investment conditions: projects, which shall not exceed 10% of
the value of InvIT Assets.
05 What is the minimum subscription required in a public issue of the

Units of an InvIT? Is there any requirement for minimum number
of investors?
A minimum subscription of 90% of the Issue

size is required for a public issue. In the event
minimum subscription is not received, the
InvIT would have to refund the application
money received from prospective investors
within a period of 12 Working Days from the
Issue Closing Date, failing which the
Investment Manager shall be liable to pay
interest at a rate of 15% per annum for the
period of delay. ere should be at least 20
investors in the public issue, with each
investor holding not more than 25% of the
Units, at any time.

06 Can an InvIT issue debt securities?
An InvIT whose Units are listed on a shall follow the provisions of SEBI ILDS
recognized stock exchange may issue debt Regulations. Such debt securities shall be
securities in the manner specified by SEBI. listed on a recognized stock exchange.
For the issuance of debt securities, an InvIT
07 What are the borrowing limits applicable to an InvIT?

An InvIT, its Holdcos and SPVs are and is up to 70% of the InvIT Assets, the
permitted to have consolidated borrowings InvIT shall be required to (i) obtain credit
and deferred payments of up to 70% of the ratings of ‘AAA’ or the equivalent for its
value of the InvIT Assets. consolidated borrowing and proposed
borrowings from a credit rating agency
In the event the borrowings and deferred registered with SEBI, (ii) utilise the funds
payments exceed 25% of the InvIT Assets only for the acquisition or development of
and is up to 49% of the InvIT Assets, the infrastructure projects, (iii) have a track
InvIT shall be required to obtain (i) credit record of at least six continuous distributions
rating from a credit rating agency registered in the years preceding the financial year in
with SEBI ; and ( ii) approval of the which the borrowing is being availed; and
Unitholders. (iv) obtain approval of the Unitholders.
In the event the borrowings and deferred
payments exceed 49% of the InvIT Assets
08 What is the minimum holding period for Units forming a part of the
‘offer for sale’ in a public issue or private placement of Units?
e Units, forming a part of the ‘offer for sale’ equity shares, compulsorily convertible
in a public issue or private placement of securities or partnership interest in the
Units, should have been held for a period of Holdco or the Project SPV against which
at least one year prior to the filing of the Dra such Units have been received shall be
Offer Documentor Preliminary Placement considered for the purposes of such
Memorandum. e holding period for calculation of one year period.

09 Is there any minimum percentage of Units required to be offered in a
public issue?
e minimum percentage of Units required more than `40,000 million, then, at
to be offered to the public in a public issue or least 10% of the Units shall be offered to
a private placement is as follows: the public.
(a) If the post-Issue capital of the InvIT In the event initial public shareholding is less
calculated at the offer price is less than than 25% in accordance with (b) or (c) above,
` 16,000 million, then, at least 25% of the InvIT shall be required to increase its
the Units shall be offered to the public; public shareholding to 25% within a period
of three years from the date of initial listing.
(b) If the post-Issue capital of the InvIT For the above purposes, “public” refers to
calculated at the offer price is equal to or Unitholders other than the Sponsor, the
more than `16,000 million and less Investment Manager, the Project Manager
than ` 40,000 million, then, such and each of their related parties and
percentage of Units equivalent to associates as defined under the InvIT
`4,000 million shall be offered to the Regulations.
public; and
(c) If the post-Issue capital of the InvIT

calculated at the offer price is equal to or
10 What constitutes private placement? What are the eligibility requirements

and other important conditions applicable to a private placement?
A private placement is an offer limited

to Institutional Investors and Bodies
Corporate. Further, the minimum number of
Unitholders pursuant to a private placement,
other than the Sponsor and its related parties
and associates, is five, with each such
Unitholder holding not more than 25% of
the Units, and a minimum investment from
each investor being `10 million. Further, a
private placement cannot be made to more
than 1,000 investors. Additionally, no
advertisements can be issued in relation to a
private placement.
In respect of a privately placed InvIT,

minimum 80% of the value of the record of revenue from operations for a
InvIT Assets shall be invested in eligible period of not less than one year; or (iii) is a
infrastructure projects. Eligible infrastructure pre-commercial operations date project; OR
projects mean such projects which prior to (b) for non-PPP projects: (i) has received all
transfer to the InvIT satisfy the following the requisite approvals and certifications for
conditions: (a) for PPP projects: (i) it is a commencing construction of the project.
completed and revenue generating project; or
(ii) is one which has achieved the commercial
operations date and does not have a track
11 What is the minimum subscription required in a private placement?

Is there any requirement for minimum number of investors?
 e r e i s n o m i n i m um s u b s c r i p t i o n have at least five investors (other than the

requirement in a private placement of Units Sponsor and its relate d parties and
by an InvIT. associates), with each Unitholder holding
not more than 25% of the Units of the InvIT.
On a continuous basis, an InvIT is required to
12 Are units required to be issued in dematerialised form?

Yes, Units of an InvIT are required to be issued to applicants in the dematerialized form only.
13 Is an InvIT permitted to have multiple classes of Units?

e InvIT Regulations do not permit any be issued to the Sponsor or its associates,
InvIT to have multiple classes of units and no provided such subordinate Units carry
Unitholder shall enjoy superior voting or inferior voting or other rights, as compared to
other rights. However, subordinate Units may other Units.
14 What are the corporate approvals required for Issue of Units in India?
A public issue or a private placement of Units directors of the Investment Manager and the
of an InvIT requires approval of the board of Sponsor to undertake an Issue of Units.

15 What is the ASBA mechanism? 16 Is participation through
ASBA mandatory?
ASBA is a mechanism prescribed by SEBI,
which may be used in an Issue of Units by Yes, the ASBA facility is mandatory in all
InvITs, wherein the application money can public issues.
be blocked in the bank account, details of
which are provided in the application form,
until just prior to allotment of Units as
opposed to the application money being
submitted along with the application form.

III. Parties and
Intermediaries to
an InvIT
01 Who is a Sponsor? What are the eligibility requirements for a Sponsor?
An InvIT, being a trust, the Sponsor of an (b) e Sponsor or its associates should
InvIT is the author and is required to transfer have a sound track record of at least five
the initial portfolio of assets to an InvIT. years in development of infrastructure
or fund management in the
A Sponsor may be a company, an LLP or a infrastructure sector. Further, if the
Body Corporate. Sponsor is an infrastructure developer,
e key eligibility requirements for a it should have developed at least two
Sponsor are: projects; and
(a) If the Sponsor is a Body Corporate or a (c) e Sponsor should be a fit and proper
company, its net worth should not be person based on the criteria specified
less than `1,000 million. If the Sponsor under S che du le I I of the S EB I
is an LLP, it net tangible assets should Intermediaries Regulations.
not be less than `1,000 million.;
02 What are the duties, roles and responsibilities of a Sponsor?

e duties, roles and responsibilities of the under any law, regulation, circular or
Sponsor include: guidelines issued by the government or
regulatory or concessioning authority
(a) Establishing the trust, appointing the or the concession agreement.
Trustee and the Investment Manager
and making an application to SEBI for Further, the Sponsor is subject to certain
registration of the InvIT; lock-in requirements applicable to the Units
held by it. For further details of the lock-in
(b) Transferring or undertaking to transfer requirements, please see Section V, Question
to the InvIT, its entire shareholding or
14.
interest in the Holdco or the Project
SPV(s), or the ownership of the
infrastructure project(s) prior to
allotment of Units of the InvIT; and
(c) e InvIT Regulations provide an

exception to this requirement, if there
are any mandator y shareholding
requirements applicable to the Sponsor

03 Who is a Trustee? What are the eligibility requirements for a Trustee?
e Trustee is the owner of the InvIT Assets, (b) e Trustee should not be an associate
which are held by it in trust. e Trustee holds of the Sponsor, the Investment
InvI T A ss e ts f or th e b en e fi t o f th e Manager or the Project Manager;
Unitholders. e ownership of the InvIT
Assets is transferred by the Sponsor (being the (c) e Tr uste e should p ossess the
author of the InvIT). For details in relation to infrastructure and personnel, etc.
the process of such transfer (including necessary to undertake the obligations
timing ), please see Section IV, Question of a trustee, to the satisfaction of SEBI;
and
2(a)(v).
(d) e Trustee should be a fit and proper
e key eligibility requirements for a Trustee
person based on the criteria specified
are:
under Schedule II of the SEBI
(a) e Trustee should be registered under Intermediaries Regulations.
the SEBI Debenture Trustee Regulations;
04 What are the duties, roles and responsibilities of a Trustee?

e duties, roles and responsibilities of a (d) Ensuring compliance with various
Trustee include: reporting and disclosure requirements
prescribed under the InvIT Regulations
(a) Appointment and removal of the and the InvIT Guidelines;
Project Manager and removal of the
Investment Mana g er, subje ct to (e) Reviewing the status of investor
compliance with InvIT Regulations; complaints and redressal thereof by the
Investment Manager;
(b) O verse eing the activities of the
Investment Manager and the Project (f ) D e c l a ri n g d i s tri b uti o n s t o th e
Ma na g er i n th e i nt er e s t o f th e Unitholders in accordance with the
Unitholders; InvIT Regulations; and
© Entering into various agreements on (g) Ensuring the activities of the InvIT are
behalf of the InvIT, including the carried out in accordance with the
Tr u s t D e e d , t h e I n v e s t m e n t InvIT Regulations, the Trust Deed and
Management Agreement and the the Offer Document.
Proj e ct Imp lementation and
Management Agreement amongst other
transaction documents;

05 Who is an Investment Manager? What are the eligibility requirements
for an Investment Manager?
e Investment Manager may be a company, (d) e Investment Manager should have at

a LLP or a Body Corporate. e Investment least one employee who has minimum
Manager is responsible for undertaking five years experience in the relevant sub-
investment decisions for the InvIT, managing sector(s) in which the InvIT has
the InvIT Assets, undertaking or initiating invested or proposes to invest;
activities related to general corporate aspects
of an InvIT (such as Unitholder’s meeting, (e) e board of directors (or governing
investor grievance redressal, Issue by an board of LLPs) of the Investment
InvIT) and ensuring compliance with the Manager should consist of at least 50%
requirements of the InvIT Regulations. independent directors; (or members of
govering board of LLPs);
e el ig ib il it y re qu irements for an
Investment Manager include: (f ) At least 50% of the board of directors
(or governing board of LLPs) of
(a) If the Investment Manager is a Body the Investment Manag er should
Corporate or a company, its net worth not be directors (or members of
should not be less than `100 million. governing board of LLPs) of any other
If the Investment Manager is an LLP, its infrastructure investment trust;
net tangible assets should not be less
than `100 million; (g) e Investment Manager is a fit and
proper person based on the criteria
(b) e Investment Manager should have specified under Schedule II of the SEBI
experience of not less than five years in Intermediaries Regulations; and
fund management or advisory services
or development in the infrastructure (h) e Investment Manager has an office
sector; in India from where operations
pertaining to the InvIT are proposed to
(c) e Investment Manager should have at be conducted.
least two employees, each having
minimum five years’ experience in fund
management or advisory services or
development in the infrastructure
sector;

06 What are the duties, roles and responsibilities of an Investment Manager?
e duties, roles and responsibilities of the strategy of the InvIT;

Investment Manager include: (d) Appointing various intermediaries with
(a) Making investment decisions with respect to the activities of the InvIT, in
respect to the underlying assets or consultation with the Trustee, in a
projects of the InvIT including any timely manner;
future investment or divestment of (e) Ensuring adequate and timely redressal
assets; of all Unitholders’ grievance pertaining
(b) Overseeing activities of the Project to activities of the InvIT; and
Manager to ensure compliance with the (f ) Undertaking all such other activities
InvIT Regulations; delegated to it by the Trustee in terms of
(c) Ensuring that the investments made by th e Inve stm ent Mana g em ent
the InvIT are in accordance with the Agreement.
InvIT Regulations and the investment
07 Who is a Project Manager? What 08 What are the duties, roles and
are the eligibility requirements responsibilities of a
for a Project Manager? Project Manager?
For any entity to act as the Project Manager, it e duties, roles and responsibilities of the
should be identified in the registration Project Manager include:
application and shall be appointed in terms
of the Proj e ct Implementation and (a) Un d e r t a k i n g o p e r a t i o n s a n d
Management Agreement submitted along management of the InvIT Assets,
with the Dra Offer Document or the including making arrangements for
Placement Memorandum, as applicable. appropriate maintenance, including
Further, the Project Manager should be a fit appointment and super vision of
and proper person based on the criteria appropriate agents; and
specified under Schedule II of the SEBI (b) Discharg ing the o b l ig ations in
Intermediaries Regulations. respect of achieving timely completion
e Project Manager is responsible for of the infrastructure project including
achieving the execution or management of the implementation, operation,
the project. In respect of PPP, the Project maintenance and management of the
Manager should be the entity responsible for infrastructure project.
execution of infrastructure projects and
achievement of project milestones in
accordance with the concession agreement
or other relevant project documents.

09 Who are the other key intermediaries involved in the operation of an InvIT?
e other key intermediaries involved in the operation of an InvIT are Valuer and Auditors.
10 Who is a Valuer? What are the eligibility requirements of a Valuer?

A Valuer may be any person, who is either a e Valuer should not be a associate of the
“registered valuer” under Section 247 of the Sponsor or the Investment Manager or the
Companies Act, 2013 or as specified by SEBI Trustee, and should have at least five years’
from time to time. experience in valuation of infrastructure assets.
11 What are the duties, roles and responsibilities of a Valuer?

e duties, roles and responsibilities of the Valuer (c) Disclosing to the InvIT, any pending
include: business transactions, contracts under
(a) Ensuring that the valuation of the InvIT negotiation and other arrangements with
Assets is impartial, true and fair in the Investment Manager or any other
accordance with InvIT Regulations; party whom the InvIT is contracting
with and any other factors that may
(b) Ensuring adequate and robust internal interfere with the Valuer’s ability to
controls to ensure the integrity of valuation provide an independent and professional
controls; and valuation of the InvIT Assets.

12 Who is an Auditor? What are the eligibility requirements of an Auditor?
e Auditor should be appointed by the certify certain forward looking projections
Investment Manager, for a period of not including the assumptions, of the InvIT
more than five consecutive years. e Assets that are owned or proposed to be
Auditor (other than an individual) may be owned by the InvIT, in accordance with
further reappointed for another five InvIT Regulations.
consecutive years, subject to Unitholders’
approva l in ac c ordanc e with InvI T e Auditor prepares a statement of special
Regulations. e audit of the InvIT’s tax benefits, which is available to the InvIT
financial statements should be conducted at and its Unitholders.
least once every year.
Further, market practice also requires the
e Auditor audits and delivers a report on Auditor to deliver “comfort letter” to the
the InvIT’s financial statements for inclusion Merchant Bankers to the Issue at various
in the Dra Offer Document, Offer stages in the Issue process, which relates to
Document and Final Offer Document, or “negative assurances” or changes in certain
the Placement Memorandum and the Final line items aer the date of the last audit, and
Placement Memorandum, as applicable. e confirmations on the financial data ,
report includes audited financial statements statem ents an d o th er finan c i a l an d
prepared in accordance with applicable operational data included in Dra Offer
accounting and auditing standards. e Document, Offer Document and Final Offer
Auditor is also required to subject itself to the Document, or the Placement Memorandum
peer review process of the ICAI and hold a and the Final Placement Memorandum, as
valid certificate issued by the Peer Review applicable.
Board of ICAI. e Auditor is required to
13 What are the duties, roles and responsibilities of an Auditor?

e duties, roles and responsibilities of the
fair picture of the state of affairs of the
Auditor include:
InvIT; and
(a) Conducting audit of the accounts of the
(c) Ensuring that the financial statements
InvIT and draing the audit report
comply with the applicable accounting
based on the examination of such
standards.
accounts;
(b) Ensuring that the accounts and the

financial statements provide true and

IV. Transaction
Documents
01 What are the disclosure documents prescribed by SEBI for Issue of
Units? Are the disclosure documents subject to prior review by SEBI
or any other regulatory authority?
e disclosure documents prescribed by

SEBI are as follows:
(a) For a Private Placement:
Placement Memorandum and Final
Placement Memorandum.
e Placement Memorandum is
required to be filed with SEBI at least (b) For a Public Issue:
five days prior to opening of the issue Draft Offer Document, Offer Document
a n d t h e S t o c k E xc h a n g e s .  e and Final Offer Document.
Placement Memorandum is sent to the
investors along with the application e Dra Offer Document is provided
form. to SEBI for review and the public
issue is underta ken throug h an
e Final Placement Memorandum is Offer Document and a Final Offer
then sent to investors along with the Document.
confirmation of allocation note and
filed with Stock Exchanges. e Final e Dra Offer Document for a public
Placement Memorandum is required to issue is required to be filed with SEBI at
be filed with SEBI within 10 working least 30 days prior to filing of the Offer
days from the date of listing of the Units Document with the designated Stock
of the InvIT. Exchange and SEBI, and should be
made available for public comments for
For private placement, there is no at least 21 days. Any comments
requirement for submitting a dra of provided by SEBI on the Dra Offer
the Placement Memorandum with any Document need to be incorporated
regulatory authority for review. before filing of the Offer Document.

02 What are the various transaction documents?

V. Process for Issue
and for Listing
01 What is the process for public listing of Units?
Provided below are the indicative steps and (i.e. Share Purchase Agreement or Asset
process for public issue of Units, which has Purchase Agreement) will be executed
been divided into six stages: pri or to th e fi l ing o f th e Dra 
Offer Document, the closing of the
(a) Pre- ling of the Draft Offer
Document transaction would occur subsequently,
however price to allotment of Units.
• Ap p o intm ent o f Merc ha nt Similarly, typically the closing of
Bankers and legal counsels Debenture Subscription Agreement or
• Kick-off meeting where the Loan Agreement between the InvIT and
senior management provides an Project SPVs would occur aer receipt
overview of the Sponsor and its of final listing and trading approval for
business to the Merchant Bankers the Units.
and the legal counsels and the (b) Filing of the Draft Offer Document
InvIT Timelines are discussed
• Execution of the Issue Agreement
• Identification of the InvIT Assets,
• Execution of the standard
the Trustee, the Investment
certificates are provided by the
Manager and the Project Manager
Trustee, the Investment Manager
• Preparation of data room and the Sponsor and executed
• Commencement of due diligence comfort letter is provided by the
exercise, simultaneously with auditors
commencement of draing of the • Filing of the Dra Offer
Dra Offer Document Document with SEBI along with
• Submission of application (along due diligence certificate by the
with executed version of the Merchant Bankers
Trust Deed and the Investment • Filing of application with the
Management Agreement) for Stock Exchanges for grant of in-
grant of certification of principle approval for listing and
registration by SEBI trading of the Units
• Execution of structure related (c) SEBI review and receipt of nal
transaction documents (for SEBI Observations
details please see Section IV,
• Replying to the interim observations
Question 2)
received from SEBI
Typically, whilst the agreement for
• Receipt of final observations from
acquisition of initial portfolio of assets
SEBI

(d) Po s t r e c e i p t o f n a l S E B I (f ) Post-issue period
observations and ling of the Offer
Document •  e R e g i strar i s to re c e i ve
electronic bid details from Stock
• Filing reply to final observations Exchanges
received from SEBI along with
updated Dra Offer Document • e Investment Manager, in
consultation with the Merchant
• Receipt of SEBI approval for the Bankers to determine the Issue
updated Dra Offer Document price
• Execution of escrow agreement • Finalization of the Issue price and
and syndicate agreement filing of the Final Offer
Document with SEBI and the
• Execution of updated standard Stock Exchanges and execution of
certificates and comfort letter the underwriting agreement
• Filing of the Offer Document • e Registrar is required to
with SEBI and the Stock submit final basis of allotment to
Exchangs and obtaining approval the designated Stock Exchange
from SEBI and designated Stock
Exchange • e Registrar and Merchant
Bankers to issue funds transfer
(e) Issue period
instructions to collection banks
• Announcement of the floor price and SCSBs for credit of funds into
or price band at least five working the public issue account
days before the Issue Opening
• Investment Manager may allot the
Date or Issue Price, in case of a
Units and credit of Units to the
fixed price Issue
successful bidders commences
• Opening of the Issue at least five
• e Investment Mang er is
working days aer the date of
required to make listing and
filing of the Offer Document with
trading approval to the Stock
SEBI
Exchanges. Stock Exchanges are
• Opening of the bidding period for empowered to issue final listing
subscription by all investors and trading approvals
except Anchor Investors
• Commencement of Trading
• Closure of the Issue

02 What is the process for private placement of Units?
Provided below are the indicative steps and Share Purchase Agreement or Asset Purchase
process for a private placement of Units: Agreement) will be executed prior to the
filing of the Placement Memorandum, the
(a) P r e - l i n g o f Placement closing of the transaction would occur
Memorandum subsequently, before allotment of Units in
• Ap p o intm ent o f Merc ha nt the private placement. Similarly, typically the
Bankers and legal counsels c l o s i n g o f D e b ent ure Su b s cri p ti o n
Agreement or Loan Agreement between the
• Kick-off meeting where the senior InvIT and Project SPVs would occur aer
management provides an receipt of final listing and trading approval
overview of the Sponsor and its for thee Units.
business to the Merchant Bankers
and the legal counsels and the (b) Filing of Placement Memorandum
InvIT timelines are discussed • Filing of application with the
• Identification of InvIT Assets and Stock Exchanges for grant of in-
the Trustee, the Investment principle approval for listing and
Manager and the Project Manager trading of Units
• Preparation of data room • Filing of the Placement

Memorandum with SEBI, at least
• Commencement of due diligence five days prior to the opening of
exercise, simultaneously with the Issue
the commencement of draing
of the Placement Memorandum • Sending the Placement
Memorandum to investors along
• Submission of application (along with the application form
with executed version of the
Trust Deed and the Investment (c) Po s t - l i n g o f t h e P l a c e m e n t
Management Agreement) for Memorandum
grant of certificate of registration • Opening and closing of the Issue
by SEBI
• Closing of the Share Purchase
• Execution of the structure related Agreement or the Asset Purchase
transaction documents and Agreement, as applicable
the listing related transaction
documents. For details please see • Sending the Placement
Section IV, Question 2. Memorandum to investors along
with a confirmation of allocation
Typica lly, whilst the a g re ement for of Units
acquisition of initial portfolio of assets (i.e.

• Allotment of Units • Fil ing the Fina l Placement
Memorandum with SEBI within
• Application for, and grant of, final 10 days of the date of listing of
listing and trading approvals Units
• Listing and commencement
of trading of Units on the
Stock Exchanges
03 Are the investors categorized? If yes, how are Units allocated amongst
different categories?
(a) Private placement: Investors are other investors. e allocation in the

categorized into (i) Institutional public issue shall be made as follows:
Investors; and (ii) Bodies Corporate,
(i) Not more than 75% to Institutional
whether Indian or foreign. ere are no
Investors.
specific allocation requirements
between the said categories of investors. (ii) Not less than 25% to other investors.
(b) Public Issue: Investors are categorized
into: (i) Institutional Investors and (ii)
04 Who are Institutional Investors?

An Institutional Investor includes: Reserve Bank of India or intermediaries
registered with SEBI, all with net-
(a) a QIB; and worth of more than `5,000 million, as
(b) a family trust or systematically per the last audited financial
important NBFCs registered with the statements.
05 Are there any restrictions applicable to Institutional Investors investing

in the Units of an InvIT?
All Institutional Investors may invest in a restricted from investing in such Units since
public issue of Units of an InvIT subject to the extant provisions of the law governing
certain restrictions. Certain categories of such Institutional Investors do not permit
Institutional Investors, such as (i) insurance investments in securities such as the Units of
companies registered with the Insurance an InvIT. However, this is likely to be
Regulatory and Development Authority; remedied soon.
and (ii) scheduled commercial banks may be

06 Who are Anchor Investors?
(a) In terms of the Issue, 75% of the Issue (e) If the price fixed as a result of book
shall be available for allocation building is higher than the price at
to Insti tuti ona l Inve stor s on a which the allocation is made to Anchor
proportionate basis. e Investment Investors, the Anchor Investor shall
Manager, in consultation with the bring in the additional amount within
Merchant Bankers, may allocate up to two days of the date of closure of the
60% of the Institutional Investor Issue. However, if the price fixed as a
portion to Anchor Investors. result of book building is lower than the
price at which the allocation is made to
(b) A Strategic Investor shall also be
Anchor Investors, the excess amount
included in the category of Anchor
shall not be refunded to the Anchor
Investors ey shall, either jointly or
Investor and the Anchor Investor shall
severally, invest not less than 5% and
take allotment at the price at which
not more than 25% of the total Issue
allocation was made to it.
size.
(f ) Neither the Merchant Bankers nor
(c) An Anchor Investor shall make an
associates of the Merchant Bankers
application of a value of at least `100
other than mutual funds sponsored
million in the public issue. In case of
entities which are associates of the
Strategic Investors, the application
Merchant Bankers or insurance
value shall be subject to the threshold
companies promoted by entities which
mentione d under the InvI T
are associates of Merchant Bankers or
Regulations.
pension funds which are associates of
(d) Allocation to Anchor Investors shall be Merchant Bankers or alternative
on a discretionary basis and subject to investment funds sponsored by the
the following: entities which are associates of
Merchant Bankers or foreign portfolio
(i) minimum of two Anchor
investors other than Category III FPIs
Investors for allocation up to
sponsored by the entities which are
`2,500 million; and
associates of the Merchant Bankers
(ii) m i n i m u m o f fi v e A n c h o r shall apply as Anchor Investors.
investors for allocation of more
than `2,500 million.
07 What is a ‘con rmation of allocation note’?

Confirmation of allotment note or the CAN finalization of the basis of allotment. e CAN
is the advice or intimation of allotment of is not a statutory requirement; however, it is
Units of the InvIT sent to the Anchor used to confirm the sales by the Syndicate
Investors who have been allotted Units upon Members.

08 What are the methods of pricing of Units?
Pricing of Units is typically undertaken consultation with the Merchant Bankers,
through the book building process. Arguably, may also be undertaken. ere is no
fixed pricing, under which the price of Units is mechanisum prescribed by SEBI in relation
fi xe d b y t h e Inv e s tm e n t Ma n a g e r i n to pricing of Units in a private placement.
09 What is book building?

e Securities and Exchange Board of India case may be. Accordingly, 'book building' is
(Issue of Capital and Disclosure Requirements) a process undertaken to determine the
Regulations, 2018, defines ‘book building’ as a demand, and to access the price for
process undertaken to elicit demand, and to determination of the value or the quantum
assess the price for determination of the of the Units proposed to be issued by the
quantum or value or coupon of specified InvIT.
securities or Indian Depository Receipts, as the
10 How are bids collected in book building?

During the specified period, investors submit a equivalent to the Bid amount will be
Bid cum application form to the SCSBs, blocked by the SCSBs in the bank account
Syndicate Members, Registered Brokers, CDPs specified in the Bid cum application form.
and RTAs, indicating the number of Units and
the price within the price band at which they e SCSBs, Syndicate Members or brokers
wish to subscribe to the Units of the InvIT. enter such Bid option of each Bidder into
the electronic bidding system as a separate
Each Bid cum application form gives the Bidder Bid.
the choice to Bid for Units at three optional
prices within the price band and specify the Aer determination of the price, the
number of Units Bid for against each such maximum number of Units Bid for
price. by a Bidder at or above the price is
considered for allocation and the rest
Bid amounts collected are deposited in the of the Bids, irrespective of the Bid price,
escrow account in terms of the escrow are automatically rejected.
agreement or in case of ASBA Bids, an amount

11 Who xes the price of Units 12 When is the allotment of Units
in an Issue? completed in case of a public issue?
e Investment Manager on behalf of the e allotment of Units and their listing on
InvIT in consultation with the Merchant Stock Exchanges should be completed within
Bankers may fix the price of Units and the 12 working days of the Issue Closing Date.
number of Units to be allotted to each
category of investors.
13 When is the allotment of Units considered to be completed in case of a

private placement?
Under the InvIT Regulations, no particular Typically, the allotment of Units should be
time line has been provided for allotment of completed within 12 working days of the
Units under a private placement. However, Issue Closing Date.
the Units of the InvIT shall be mandatorily
listed on the designated Stock Exchange
within 30 working days from the date of
allotment.
14 What are the lock-in requirements?

In terms of the InvIT Regulations, lock-in offer (including the unit holding of the
requirements are of three types: (i) that Sponsor exceeding minimum lock-in
which applies to the Sponsor of the InvIT; requirement); and (iii) that which applies to
(ii) that which applies to all Unitholders Anchor Investors and Strategic Investors in a
holding Units of the InvIT prior to the initial public issue.

15 What are the lock-in requirements applicable to the Sponsor of the InvIT?
In terms of the InvIT Regulations, the (b) either the Sponsor or one of its
Sponsors are collectively required to hold at associates shall be the Project Manager
least 15% of the total Units (on a post public and shall continue to be so for a period
issue or post private placement basis) for a of three years from listing of Units,
period of three years from the date of listing unless replaced by the Unitholders.
of Units. is is, however, subject to the
conditions that: If the above condition number (b) is not met,
or is not proposed to be met, the Sponsor
(a) the Sponsor shall be liable for all acts, shall have to collectively hold at least 25% of
commissions and representations/ the total Units (on a post public issue or post
covenants of the InvIT related to its private placement basis) for a period of three
formation and transfer of the initial years from the date of listing of Units.
portfolio of assets by the Sponsor to the
InvIT. Further, the InvIT and the Moreover, any Units held by the Sponsors in
Trustee shall also have recourse against excess of 15% or 25% (as applicable) shall be
the Sponsor in this regard; and locked in for a period of one year from listing
of Units.
16 What are the lock-in requirements applicable to any person other than
Sponsor who has been holding Units of the InvIT prior to the initial
offer?
e lock-in requirement for any person other period of 30 days from the date of allotment
than the Sponsor who has been holding in the public issue. Further, the Units allotted
Units of the InvIT prior to initial offer is one to Strategic Investors, are required to be
year from the date of listing of the Units. locked in for a period of one year from the
date of allotment in the public issue.
Additionally, Units allotted to Anchor
Investors are required to be locked in for a

VI. Disclosure
Requirements
01 What are the disclosure standards applicable in India?
Disclosure standards in India for the Offer In this respect, the key governing principle
Documents and Placement Memorandums under the InvIT Regulations is that all
issued by InvITs are substantially at par with disclosures made in the Offer Documents and
other securities markets in the world. Presently, Placement Memorandums must contain
the disclosure requirements are governed by the material, true, fair and adequate disclosures to
InvIT Regulations, and the InvIT Guidelines, enable the investors to make a well informed
in case of public issues of InvITs. However, they decision. Additionally, the Offer Documents or
are continuing to evolve based on, amongst the Placement Memorandum should not: (i) be
other things, regulatory evaluation and misleading or contain any mis-statements; and
stakeholders’ (including prospective investors) (ii) guarantee returns to the investors.
feedback.
02 What are the key areas of disclosures in offer documents and

placement memorandums?
In addition to the customary key areas such as such transactions.

the business and industry of the InvIT, risk
(e) Disclosures on title of the InvIT Assets
factors (internal and external to the InvIT),
including any material litigations
financial statements, management’s discussion
pertaining to the InvIT Assets.
and analysis of financial condition and results
of operation, other key disclosure requirements (f ) Disclosures on the status of approvals
under the InvIT Regulations include: with respect to the InvIT Assets and
approvals periodically required for the
(a) Comprehensive details pertaining to the
InvIT Assets.
Sponsor, Investment Manager, Project
Manager, Trustee and other parties. (g) Details of material litigations and
regulatory actions which are pending
(b) Brief background of the InvIT, including,
against the InvIT, the Sponsor, the
the InvIT structure and description and
Investment Mana g er, the Proje ct
details of the InvIT Assets or of any
Manager and their respective associates
arrangement pertaining to the underlying
and the Trustee, as specified.
InvIT Assets.
(h) Comprehensive details on the rights of
(c) Capital structure of the InvIT Assets
Unitholders.
including any borrowing or deferred
payments and the borrowing policies. (i ) Full valuation report, auditors report and
any sector-specific report.
(d) Details of any related party transactions
along with the procedure for dealing with

03 What are the disclosure requirements for the objects for which the Issue
is proposed?
e InvIT Regulations do not prescribe infused debt to pare down external lending.
detailed requirements for disclosures related InvIT are expected to frame similar use of
to objects. Listed trust structures typically proceeds and would accordingly need to
utilize issue proceeds for payment of include disclosures regarding consideration
consideration for acquisition of the initial for acquisition of the initial portfolio of
portfolio of assets and infusing debt into the assets and details of external loans that would
Project SPVs. Such Project SPVs utilize the be repaid or pre-paid by the Project SPVs.
04 What are the disclosure requirements for the directors and key managerial
personnel of the Sponsor(s), the Investment Manager and the Trustee?
e InvIT Regulations do not specify any (a) Trustee: Names and profiles of the
disclosure requirement in relation to directors.
directors and key managerial personnel of the
(b) Investment Manager: Brief profiles of
Sponsor and the Project Manager.
directors of the Investment Manager
In relation to the Trustee and the Investment and the Units held or proposed to be
Manager, the following details are required held by them in InvIT.
to be disclosed:
05 What are the litigation related disclosures in Offer Documents and

Placement Memorandums?
e litigation related disclosures in Offer (d). Brief description of material litigation

Documents and Placement Memorandums and regulatory actions pending against
pertaining to the Parties to the InvIT, the the Investment Manag er and its
InvIT and the InvIT Assets are as follows: associates, if any.
(a) Details of any material litigations (e). Brief description of material litigation
pertaining to the InvIT Assets. and regulatory actions pending against
the Project Manager and its associates, if
(b) Brief description of material litigation
any.
and regulatory actions pending against
the InvIT, if any. (f ). Brief description of material litigation
(c) Brief description of material litigation
the Trustee, if any.
the Sponsor and its associates, if any.

06 What nancial statements are to be included in Offer Documents and
Placement Memorandums?
In terms of the InvIT Regulations, Offer to be disclosed. e consolidated or

Documents and Placement Memorandums combined financial statements, as applicable
are required to include financial information should be prepared in accordance with
for a period of last three completed financial Indian Accounting Standards.
years. If the closing date of the last completed
financial years is more than six months before Further, projections of revenue and operating
the date of Offer Document or Placement cash flows of the InvIT are also required to be
Memorandum, the InvIT is also required to disclosed in the Offer Documents and
disclose interim financial information. Placement Memorandum (along with
related assumptions and as certified by the
If an InvIT is already in existence for the last InvIT’s Auditors) for a period of next three
three completed financial years, its historical years.
financial statements on both, standalone and
consolidated basis are required to be Additionally, the summar y financial
disclosed. However, where an InvIT is in statements of the Investment Manager and
existence for less than three years, combined the Sponsor(s) for the previous three years
financial statements of the InvIT are required are required to be disclosed.
07 What are the disclosure 08 What are the consequences

requirements in respect of of misstatements in Offer
valuation of an InvIT? Documents and Placement
Memorandum?
A full valuation report should be attached to
the Offer Documents and Placement Any misstatements in the Offer Documents
Memorandum. Further, a summary of the and the Placement Memorandum will be
valuation report, valuation methodology, considered as a contravention by the
and frequency of valuation and declaration Investment Manager, the Sponsor(s) and the
of NAV should also be disclosed in the Merchant Bankers, of the InvIT Regulations
Offer Documents and the Placement and InvIT Guidelines, and they may be liable
Memorandum. for one or more actions specified therein,
including any action provided under the
e InvIT R eg u lations a lso sp e cif y
SEBI Intermediaries Regulations.
minimum mandatory disclosures that should
be included in valuation reports.

09 What role does SEBI play in relation to misstatements?
As per the InvIT Regulations, an InvIT or under, shall be liable for one or more actions
Parties to the InvIT or any other person specified therein. Further, in terms of the
involved in the activity of the InvIT who SEBI Act, penalty proceedings can also be
contravenes the SEBI Act or the InvIT initiated by SEBI with regard to any of the
Regulations or the InvIT Guidelines, contraventions specified above.
notifications or instructions issued there
10 What is the liability of intermediaries associated with an initial public

issue or private placement of Units for misstatements and omissions
in the Offer Documents or Placement Memorandum, as applicable?
In a Public Issue, the Merchant Bankers, are under which they are registered with SEBI.
required (under the InvIT Regulations) to
submit a due diligence certificate to SEBI at e InvIT Regulations further provide that
various stages of the listing process in a public any contravention of any provisions of
issue and at the time of filing of the final any of these regulations or guidelines or
Placement Memorandum, in a private circulations thereof, issued by SEBI, by the
placement with respect to the contents intermediaries, shall be liable for one or more
therein and could therefore be held liable by actions as specified therein and any action
SEBI. Moreover, the responsibility of the provided under the SEBI Intermediaries
Merchant Bankers with respect to due Regulations and the Merchant Banker
diligence shall continue even aer the Regulations.
completion of the Issue process.
Separately, all intermediaries can be held

liable under the applicable SEBI regulations
11 Can private action be initiated

for misstatements?
Yes, any person or group of persons which
have sustained any loss or damage due to
misstatements in Offer Documents and
Placement Memorandum or fraudulent
conduct may approach any court with
appropriate jurisdiction in order to claim
compensation for such loss or damage.

VII. Corporate
Actions
01 What are the corporate approvals required by the Sponsor, Investment
Manager and the Trustee for Issue of Units?
Approval of board of directors of the Sponsor Offer Document, in case of a public issue, or
shall be required for setting-up an InvIT, Placement Memorandum, in case of a private
appointing the Trustee and filing of the p l a c em ent , a n d e xe c uti o n o f va ri o us
application with SEBI for registration of the agreements in relation to the transaction. ese
InvIT. Approval of the board of directors of the authorizations will be required at various stages
Sponsor and the Investment Manager shall be in the transaction, including at the time of
required for undertaking an Issue of Units of making the application to SEBI for registration
the InvIT. Further, approval of the board of of the InvIT, filing the Dra Offer Document,
directors (or a duly constituted committee the Offer Document and the Final Offer
thereof ) of the Investment Manager shall be Document, in case of a public issue, or
required for various activities related to Issue of Placement Memorandum, in case of a private
Units, such as approval of the Dra Offer placement and listing or allotment of Units on
Document, the Offer Document and the Final the Stock Exchanges.
02 What are the approvals required for transfer of assets by the Sponsor
to the InvIT?
Each Sponsor would require approval from its
board of directors for transfer of the initial
portfolio assets. Moreover, depending
upon the materiality of the assets being
transferred by the Sponsor, shareholders’
approval may also be required by the Sponsor.
e transfer of the initial portfolio assets may
also require third party approvals, depending
upon regulatory restrictions, if any, and
contractual arrangements entered into by the
Sponsor. Such approvals would include those
related to any transfer restrictions applicable to
the assets or the Project SPVs, imposed by
relevant regulatory authorities, any restrictions
under licenses and approvals applicable to the
assets or the Project SPVs, any restrictions
un d er fi na n c i n g a g r e em ent s a n d a ny
restrictions imposed by the private equity
investors, if any, in the Sponsor or the Project
SPVs.

03 Are there any speci c corporate governance requirements applicable to
the InvIT or its Investment Manager?
ere are no specific corporate governance independent decision making, which is in the
requirements applicable to the InvIT. In best interest of all Unitholders, and to
accordance with the InvIT Regulations, 50% address any conflicts of interest with the
of the board of directors of the Investment S p o n s o r.  e s e s t r u c t u r e s i n c l u d e
Manager should comprise of independent constitution of various committees with
directors and such directors should not be majority of independent directors, such as
directors or members of the governing body audit committee and investment committee,
of another InvIT. However, typically the and implementing policies, such as those
Investment Manager is expected to put in covering related party transactions and
place governance structures to ensure conflicts of interest.
04 Are there any speci c requirements regarding the composition of the

board of directors of the Project SPVs?
In accordance with the InvIT Regulations,

the Investment Manager, in consultation
with the Trustee, shall appoint a majority of
the board of directors of the Holdco and the
Project SPVs.

VIII. Certain Post-
Issue Considerations
01 What are the distribution requirements applicable to an InvIT?
An InvIT is required to distribute at least Document or the Placement Memorandum.

90% of its net distributable cash flows to its
Unitholders. Furthermore, the Project SPVs In addition to the periodic distributions
are required to distribute at least 90% of their specified above, if any infrastructure asset is
net distributable cash flows to the InvIT, or, if sold by the InvIT, at least 90% of the proceeds
applicable, the Holdco. In case of a two- of such sale are required to be distributed to
tiered structure of an InvIT, the Holdco is the Unitholders, unless such proceeds are
required to distribute to the InvIT (i) 100% proposed to be re-invested in other
of the cash flows received by it from the infrastructure assets within a period of one
Project SPVs; and (ii) 90% of the net year.
distributable cash flows generated by it.
Such distributions shall be declared and

made (i) once every six months in every
financial year, in case of publicly offered
InvITs; and (ii) once every year in case of
privately placed InvITs, and shall be made not
later than fieen days from the date of
declaration.
Subject to the above, such distribution shall

be in the manner mentioned in the Offer
02 What are the reporting requirements applicable to an InvIT?

e reporting requirements applicable to audited consolidated financial statements for
an InvIT are provided under the InvIT the year of the InvIT.
Regulations and the Continuous Disclosures
Circular, and state that the Investment e InvIT is required to submit to the
Manager shall (i) submit an annual report to designated Stock Exchanges (i) the financial
Unitholders and to the designated Stock information for the first half-year period of the
Exchanges; and (ii) submit a half-yearly report financial year; (ii) the annual financial
to the designated Stock Exchanges. Such information; and (iii) the financial information
annual and half yearly reports shall contain for the second half-year period of the financial
disclosures as specified under the InvIT year, which should be submitted along with the
Regulations, including a brief report of annual financial information.
activities of the InvIT and summary of the

e financial information of the InvIT should the InvIT; (v) statement of earnings per Unit;
be disclosed on both standalone as well as a and (vi) statement of related party transactions.
consolidated basis. e annual financial
information should contain comparative Further, the Investment Manager shall disclose
information for the immediately preceding to the designated Stock Exchanges, any
year and the half-yearly financial information information having bearing on the operation or
should contain comparative information for performance of the InvIT as well as price
the (i) immediately preceding half-year; and sensitive information, such as details of any
(ii) corresponding half-year in the immediately borrowing of the Holdco or the Project SPVs or,
preceding financial year. acquisition or disposal of any assets.
In addition to certain key financial statements

that need to be disclosed by the InvIT, such as
the balance sheet, statement of profit and loss,
statement of net assets at fair value and
statement of changes in Unitholders’ equity,
the InvIT is also required to disclose, inter alia,
(i) statement of net distributable cash flows of
the InvIT as well as of the underlying Holdcos
and the Project SPVs; (ii) fee paid to the
Investment Manager and the Project Manager
and whether there have been any material
change in the fee paid; (iii) if the InvIT holds
assets in more than one infrastructure sector or
sub-sector, details of investments made by the
InvIT in all such infrastructure sectors and sub-
sectors; (iv) changes in accounting policies of
03 Are there any regulations governing insider trading?

All listed companies are required to comply (b) Code of practices and procedures for
with the Insider Trading Regulations with fair disclosure of unpublished price
respect to treatment of price sensitive sensitive information including related
information. Accordingly, each listed to ligitiation business purpose and
company is also required to formulate the leakage of unpublished price sensitive
following: information.
(a) Code of conduct for regulating , Similar requirements are expected to be

monitoring and reporting of trading by applicable to InvITs.
insiders, as defined under the Insider
Trading Regulations; and

IX. Publicity and
Research
A. PUBLICITY
01 What are the publicity restrictions applicable in India?
(a) All public communications should (f ) One-on-one meetings with investors,
only contain factual information especially at conferences should not be
and should not contain conjectures or conducted;
any matter extraneous to the contents
of the Dra Offer Document, the (g) ere should not be participation in the
Offer Document and the Final Offer preparation and distribution of research
Document, in case of a public issue, or reports or analysis;
Placement Memorandum, in case of a (h) It should be ensured that there is no
private placement; mention of the Issue in any form on their
(b) No interviews with the media should be websites; and
scheduled, nor any responses should be (i) All information on their websites should
made to queries from the media, without be consistent with the disclosures
consulting the legal counsels; in the Dra Offer Document, the
(c) In case of any previously scheduled Offer Document and the Final Offer
interviews, no information regarding the Document, in case of a public issue, or
Issue should be discussed; Placement Memorandum, in case of a
private placement.
(d) All advertisements issued by the InvIT
from the period of filing the Dra Offer Additionally, no advertisement in relation to
Document until the listing of the Units the Issue shall be issued by an InvIT, which is
has to contain prescribed disclaimers proposing to make a private placement of Units.
informing the public about the Issue;
(e) Factual information about the business of

the InvIT may b e answere d over
unsolicited telephone inquiries from the
press, consistent with past practice, but
any statements concerning the proposed
Issue should be avoided;

02 To whom are the publicity 03 What are the periods during
restrictions applicable? which the publicity restrictions
become applicable?
Publicity restrictions are applicable to the
InvIT, the Sponsor, the Investment Manager, e publicity restrictions are applicable in
the Trustee, the Project Manager and their relation to a public issue by an InvIT from the
respective directors, subsidiaries, Holdcos, date of the meeting of the board of directors of
Associates of the InvIT and persons acting on the sponsor or the Investment Manager,
their behalf, including public relations, approving the public issue or the date of
marketing or advertising agencies and registration of the InvIT with SEBI, whichever
financial advisors. is earlier. e publicity restrictions would
continue to be applicable up to the date of
allotment of Units being offered or issued in
the public issue.
04 What are the various advertisements that are required to be released in

a public issue of Units?
e various advertisements that are required (e) e basis of allotment advertisement

to be released in the public issue of Units are: which is required to be published within
ten days from date of completion of
(a) e pre-Issue advertisement, which is activities in relation to the Issue and
required to be published post filing of prior to listing of the Units.
the Offer Document with SEBI and the
Stock Exchanges and prior to the Issue
Opening Date;
(b) e price band advertisement, which is

required to be published at least five
working days before the Issue Opening
Date;
(c) e public issue opening advertisement,

which may be published prior to the
Issue Opening Date;
(d) e public issue closing advertisement

which may be published prior to the
Issue Closing Date; and

B. RESEARCH
01 Are there any laws applicable to research analysts?
Yes, the Research Analyst Regulations, are research reports in relation to public issue of
applicable to research analysts and primarily units by an InvIT.
govern the preparation and dissemination of
02 To whom are the Research Analysts regulations applicable?
e Research Analyst Reg ulations are (c) Associates of the InvIT;

applicable to:
(d) all persons acting on behalf of the InvIT;
(a) the InvIT; and
(b) the Sponsor, the Investment Manager, the (e) the Merchant Bankers, Connected
Trustee and the Project Manager of the Analysts, Syndicate Members and their
InvIT, as well as their respective directors respective affiliates and Associates.
and Associates;
03 What are the restrictions applicable to research reports?

Certain guidelines and procedures in relation (b) e research report should be, and
to preparation and distribution of research present itself as, an outsider’s view of the
reports are provided below: InvIT and should be independently
produced.
(a) e Merchant Bankers or their affiliates
should not distribute a research report (c) e source of the information shall be
any where in the world if anyone clearly acknowledged.
responsible for the preparation of such
research report has had access to, or is in (d) e research rep or ts shou ld a lso
possession of, material information not contain any valuations or
(whether or not reflected in the research recommendations in relation to the
report) that is not known to the public securities of the companies.
and will not be included in Dra Offer (e) e research reports must not contain any
Document, Offer Document and Final reference to the Issue or any information
Offer Document, in case of a public issue, about the Issue.
or the Placement Memorandum, in case
of a private placement. (f ) the research reports shall be reviewed by
the counsels to the Merchant Bankers
prior to their publications.

X. Preferential Issue
of Units
01 What is a preferential issue?
A preferential issue is a subsequent issue of initial offer. e requirements applicable to a
Units undertaken on a private placement preferential issue of Units by a listed InvIT
basis to select Institutional Investors by an are provided in the Preferential Issue
InvIT that has listed its Units pursuant to an Guidelines.
02 What are the eligibility conditions to undertake a preferential issue?

e eligibility conditions for undertaking a one and a half times the votes cast
preferential issue include the following: against the preferential issue;
(a) e Units of the InvIT being offered in (c) e InvIT should be in compliance
the preferential issue should be of the with the conditions for continuous
same class as the Units issued in the listing and disclosure obligations
initial offer by the InvIT, and should provided in the InvIT Regulations and
have been listed on a recognised stock the Continuous Disclosures Circular,
exchange for at least six months and should also be in compliance with
preceding the date of issuance of notice the minimum public unitholding
to Unitholders for a resolution requirements prescribed in the InvIT
authorising the preferential issue; Regulations; and
(b) e preferential issue should be (d) Each preferential issues by an InvIT

approved by Unitholders through a should be separated by a six month
resolution where votes cast in favour of interval.
the preferential issue should be at least
03 How many investors can participate in a preferential issue?

Not less than two and not more than 1,000 investors can participate in preferential issues of
Units by an InvIT in one financial year.

04 When is an InvIT or an Investment Manager required to notify the
stock exchanges about a decision to proceed with a preferential issue?
Under the InvIT Regulations, an Investment accordance with the InvIT Regulations.
Manager is required to disclose details of the Further, an additional issue of Units by an
outcome of meetings of Unitholders. InvIT is required to be disclosed to such stock
Accordingly, the Investment Manager will exchanges. However, the InvIT Regulations
make disclosure to the stock exchanges where and the Continuous Disclosures Circular do
the Units of the InvIT are listed, upon the not provide any guidance on the timing of
Unitholders approving a preferential issue in such disclosure.
05 Are there any restrictions on 06 What are the requirements for

allotment of Units offered in a pricing of Units offered through
preferential issue? a preferential issue?
Under the Preferential Issue Guidelines, Preferential issues of Units are required to be
allotment of Units in a preferential issue priced above a floor price fixed with reference
cannot be made, directly or indirectly, to to the Relevant Date. Such floor price is the
Parties to the InvIT or their related parties. average of the weekly high and low of the
However, Units may be allotted to a Sponsor closing prices of the listed Units of the InvIT
only in order to enable such Sponsor to meet during the two weeks preceding the Relevant
the minimum unitholding requirements Date.
applicable to Sponsors under the InvIT
Regulations.
07 What are the disclosure requirements for a preferential issue?

e Preferential Issue Guidelines prescribe permit disclosure made previously, as part
disclosure requirements for an Offer of the initial public issue or subsequently, to
Document relating to a preferential issue. be incorporated by reference in the
Whilst disclosure requirements are largely preferential issue offer document.
similar to the disclosure requirements for a
public issue, the Preferential Issue Guidelines

XI. Offerings By
Unlisted Invits
rough Private
Placements
01 What constitutes a private placement of Units by an unlisted InvIT?
What are the eligibility requirements and other important conditions
based applicable to a privately placed unlisted InvIT?
A private placement of Units by an unlisted In respect of a privately placed unlisted InvIT,

InvIT is an offer limited to Institutional not less than 80% of the value of InvIT Assets
Investors and Bodies Corporate. An investor shall be invested in eligible infrastructure
in an unlisted InvIT is required to invest at projects.
least `10 million. ere should be at least 20
investors in the private placement. Such offer
is required to be made through a placement
memorandum.
02 Is an unlisted private placed 03 What are the disclosure require-

InvIT permitted to borrow? ments applicable to a privately
placed unlisted InvIT?
Yes, an unlisted private placed InvIT is
permitte d to borrow subje ct to the e disclosure standards applicable to a
conditions specified in the Trust Deed and privately placed unlisted InvIT are the same as
up to such amount as specified in the Trust those applicable to a privately placed listed
Deed. InvIT. Please see Chapter VI of Part B for
further details.
04 Are there any provisions of the InvIT Regulations that are not applicable
to a privately placed unlisted InvIT?
Provisions in relation to change in the up of InvITs, borrowing and reporting are not
investment manager, change of control of the applicable to privately placed unlisted InvITs
investment manager, requirement of a in the manner applicable to listed InvITs.
merchant banker, timing of audits, winding
05 Can an unlisted privately placed InvIT be listed subsequently?

Yes, an unlisted privately placed InvIT can be requirements applicable to privately placed
listed subsequently as a privately placed listed listed InvITs.
InvIT subject to compliance with the

06 Can a privately placed listed InvIT delist? Can it be converted to an
unlisted privately placed InvIT?
Yes, a privately placed listed InvIT can delist its Unitholders by value. e dissenting
units and be converted to an unlisted privately Unitholders shall be provided with an exit
placed InvIT subject to approval of 90% of the opportunity.

XII. Glossary
Term Meaning
Allotment and e Guidelines for determination of allotment and trading lot size
Trading Lot Guidelines for Real Estate Investment Trusts (REITs) and Infrastructure
Investment Trusts (InvITs) issued by SEBI through a circular bearing
number SEBI/HO/DDHS/DDHS/CIR/P/2019/59 dated April
23, 2019
Anchor Investor A QIB who makes an application for a value more than `100 million
in a book built Issue
Anchor Investor One Working Day prior to the Issue Opening Date, on which Bids by
Issue Period Anchor Investors are to be submitted and allocation to Anchor
Investors shall be completed
ASBA An application, whether physical or electronic, used by ASBA

Bidders to make a Bid by authorising an SCSB to block the Bid
Amount in the ASBA Account
Auditor e auditor of the InvIT
Bid An indication to make an offer during the Issue Period by a Bidder or

during the Anchor Investor Issue Period by an Anchor Investor, to
subscribe to or purchase Units of the InvIT
Bidder Any prospective investor, other than an Anchor Investor who makes a
Bid in the Issue
Bodies Corporate Bodies corporate, as defined under Section 2(11) of the Companies
Act, 2013, as amended from time to time
Book Building Process A process undertaken by which a demand for the Units proposed to
be issued by the InvIT is elicited and built up and the price for such
Units is assessed for the determination of the quantum of such Units
to be issued by means of a notice, circular, advertisement, document
or offer document
Collecting Depository A depository participant as defined under the Depositories Act,

Participant/CDP 1996, registered with SEBI and who is eligible to procure
Bids at the designated CDP locations in terms of the circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
issued by SEBI
Connected Analysts A research analyst or research entity that is an affiliate or associate of

any of the Merchant Bankers
Continuous Disclosures Circular on continuous disclosures and compliances by InvITs dated

Term Meaning
Circular November 29, 2016 issued by SEBI
Designated Intermediaries Syndicate, sub-syndicate/agents, SCSBs, Registered Brokers, CDPs

and RTAs, who are authorized to collect ASBA Forms from the
ASBA Bidders, in relation to the Issue
Draft Offer Document A dra offer document, issued in accordance with the InvIT
Regulations and filed with SEBI and the Stock Exchanges including
any addenda or corrigenda thereto filed with SEBI and the Stock
Exchanges
FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a

Person Resident Outside India) Regulations, 2017
Final Offer Document Final Offer Document, filed with SEBI and the Stock Exchanges aer
the Pricing Date in accordance with the InvIT Regulations and the
SEBI Guidelines and includes any addenda or corrigenda thereto
filed with SEBI and the Stock Exchanges
Future Assets e assets owned by the Sponsor(s) proposed to be included in the

deed of right of rst offer or refused
Holdco or holding A company or an LLP (i) in which the InvIT holds or proposes to
company hold controlling interest and not less than 51% of the equity share
capital or interest and which in turn has made investments in other
Project SPVs, which ultimately hold the infrastructure assets; and (ii)
which is not engaged in any other activity other than holding of the
underlying Project SPVs, holding of infrastructure projects and any
other activities pertaining to and incidental to such holdings.
Institutional Investors Institutional Investor means: (i) a QIB; or (ii) family trust or
systemically important nonbanking financial companies registered
with the Reserve Bank of India or intermediaries registered with
SEBI, all with net-worth of more than ` 5,000 million, as per the last
audited financial statements
Investment Manager A company, a Body Corporate or an LLP which manages the InvIT
Assets, manages the investments of the InvIT and such other activities
as specified under the InvIT Regulations
Investment Management Investment management agreement entered into between the

Trustee
Agreement (on behalf of the InvIT) and the Investment Manager
InvIT(s) Infrastructure Investment Trust(s)

Term Meaning
InvIT Assets e assets owned by an InvIT, whether directly or through a Holdco

or Project SPVs or both, and includes all rights, interests and benefits
arising from and incidental to the ownership of such assets
InvIT Guidelines e Guidelines for Public Issue of Units of InvITs issued by SEBI
through a circular bearing number CIR/IMD/DF/55/2016, dated
May 11, 2016
InvIT Regulations e Securities and Exchange Board of India (Infrastructure

Investment Trusts) Regulations, 2014, including any amendments
guidelines and circulars issued by SEBI from time to time
Issue e issue of the Units of an InvIT
Issue Closing Date Except in relation to any Bids received from the Anchor Investors, the
date aer which the Designated Intermediaries will not accept any
Bids
Issue Opening Date Except in relation to any Bids received from the Anchor Investors, the
date on which the Designated Intermediaries shall start accepting
Bids
Issue Period Period between the Issue Opening Date and the Issue Closing Date,
inclusive of both days, during which Bidders, other than Anchor
Investors, can submit their Bids, including any revisions thereof
Listing Regulations e Securities and Exchange Board of India (Listing Obligations

and Disclosure Requirements) Regulations, 2015, as amended from
time to time
LLP A limited liability partnership as defined under the Limited Liability

Partnership Act, 2008
Members of the Syndicate e Merchant Bankers and the Syndicate Members
Merchant Banker Merchant bankers, associated with the Issue and responsible for due
diligence and other Issue related activities
Merchant Banker e Securities and Exchange Board of India (Merchant Bankers)

Regulations Regulations, 1992
NAV e value of the InvIT (assets reduced by extended debt) divided by

the number of outstanding Units, on a particular date
Offer Document An offer document issued in accordance with the provisions of the
InvIT Regulations and the InvIT Guidelines, including any addenda
or corrigenda thereto filed with SEBI and the Stock Exchanges

Term Meaning
Parties to the InvIT e Sponsor, the Trustee, the Investment Manager and the Project
Manager
Placement Memorandum A document filed with SEBI and the Stock Exchanges for a privately
placement undertaken by an InvIT
PPP Public-private partnership
Preferential Issue Guideliness for Preferential Issue of Units by Infrastruture

Guidelines Investment Trust (InvITs) dated June 5, 2018 issued by SEBI
Project Implementation and Project Implementation and Management Agreement entered into
Management Agreement between the Trustee (acting on behalf of the InvIT ), the Investment
Manager, the Project Manager and the Project SPVs
Project Manager A person designated as the project manager of the InvIT, responsible
for execution and management of the project.
Project SPVs A company or an LLP in which either the InvIT or the Holdco holds
or proposes to hold controlling interest and not less than 51% of the
equity share capital or interest. However, in case of PPP projects
where such acquiring or holding is disallowed by government or
regulatory provisions under the concession agreement or such other
agreement, the above requirement shall not apply and shall be subject
to provisions of the InvIT Regulations. It also includes a company or
an LLP (i) which holds not less than 99% of its assets directly in
infrastructure projects and does not invest in other Project SPVs; and
(ii) which is not engaged in any other activity other than activities
pertaining to and incidental to the underlying infrastructure projects
QIBs or Quali ed Qualified institutional buyers shall mean (i) a mutual fund, venture
Institutional Buyers capital fund, alternative investment fund and foreign venture capital
investor registered with SEBI, (ii) a foreign portfolio investor, other
than individuals, corporate bodies and family offices, (iii) a public
financial institution, (iv) a scheduled commercial bank, (v) a
multilateral and bilateral development financial institution,(vi) a
state industrial development corporation, (vii) an insurance company
registered with the IRDAI, (viii) a provident fund with minimum
corpus of ` 250 million, (ix) a pension fund with minimum corpus of
` 250 million, (x) National Investment Fund set up by resolution no.
F. No. 2/3/2005 - DDII dated November 23, 2005 of the
Government of India published in the Gazette of India,(xi) insurance
funds set up and managed by army, navy or air force of the Union of
India, (xii) insurance funds set up and managed by the Department of

Term Meaning
Posts, India and (xiii) systemically important non-banking financial

companies
Registered Brokers Stock Brokers registered with the stock exchanges having nationwide
terminals, other than the Members of the Syndicate, eligible to
procure Bids in terms of Circular No. CIR/CFD/14/2012 dated
October 4, 2012 issued by SEBI
Registrar A registrar to the issue registered under the Securities and Exchange
Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993
Registrar and Transfer Registrar and transfer agents registered with SEBI and eligible to
Agents or RTAs procure Bids at the designated RTA locations in terms of circular no.
CIR/CFD/POLICYCELL/11/2015 dated November 10, 2015
issued by SEBI
Registration Act e Registration Act, 1908
ROFO Right of first offer
SCRA e Securities and Exchange Board of India Securities (Contracts)

Regulation Act, 1956, as amended from time to time
SEBI e Securities and Exchange Board of India
SEBI Debenture e Securities and Exchange Board of India (Debenture Trustee)

Trustee Regulations Regulations, 1993, as amended from time to time
SEBI Intermediaries e Securities and Exchange Board of India (Intermediaries)

SEBI Research Analyst e Securities and Exchange Board of India (Research Analysts)
Regulations Regulations, 2014, as amended from time to time
Self Certi ed Banks registered with SEBI, offering services in relation to ASBA, a
Syndicate Bank/SCSB list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?doRecog
nisedFpi=yes&intmId=34 and updated from time to time
Sponsor A company, Body Corporate or an LLP which sets up the InvIT and is
designated as such at the time of making an application for
registration of the InvIT
Stock Exchanges Any stock exchange where the Units of an InvIT are proposed to be
listed

Term Meaning
Strategic Investor An infrastructure finance company registered with the Reserve Bank
of India, a scheduled commercial bank , an international mutilatera l
financial institution, a systematically important non banking
financial companies registered with the Reserve Bank of India and
foreign portfolio investors. ese investors together shall invest not
less than five per cent of the total issue size of the InvIT or such
amount as may be specified by SEBI from time to time
Syndicate Members Intermediaries, registered with SEBI who are permitted to carry out
activities as an Underwriter
Transaction Documents Documents, including but not limited to agreements, entered into by
or on behalf of the InvIT
Trust Deed A trust deed entered into between the InvIT, Sponsor and the Trustee
Trustee A trustee is a person who holds the InvIT Assets for the benefit of the
Unitholders and is registered with SEBI under the SEBI Debenture
Trustee Regulations
Trusts Act e Indian Trusts Act, 1882
Unit A unit represents beneficial interest in the InvIT, and such Units
together represent the entire beneficial interest in the InvIT
Unitholder(s) Any person who holds Units of the InvIT
Valuer A valuer as defined under the InvIT Regulations
Working Day Working Day, with reference to (a) announcement of Price Band;
and (b) Bid/Issue Period, shall mean all days, excluding Saturdays,
Sundays and public holidays, on which commercial banks in Mumbai
are open for business; and (c) the time period between the Bid/
Issue Closing Date and the listing of the Equity Shares on the Stock
Exchanges, shall mean all trading days of Stock Exchanges,
excluding Sundays and bank holidays, as per the SEBI Circular
SEBI/HO/CFD/DIL/CIR/P/2016/26 dated January 21, 2016

D. REAL ESTATE
INVESTMENT TRUSTS
I. Introduction
01 What is a REIT?
A REIT or a real estate investment trust is an income generating properties within the
investment vehicle set up as a trust under the framework provided under the REIT
Trusts Act and reg istered under the Regulations.
Registration Act. In accordance with the
Trusts Act, a trust is an obligation attached to For the purposes of the REIT Regulations,
the ownership of property. e obligation is ‘re a l e s tat e ’ i n c l u d e s l a n d a n d a ny
created by the author of the trust, accepted by permanently attached improvements to it
the owner of property and owed to the whether leasehold or freehold but excludes
beneficiaries identified in the trust deed. In mortgage. Assets falling under the purview of
the context of a REIT, the trust is created by ‘infrastructure’ are not considered as ‘real
the Sponsor, the ownership of the property estate’ for the purposes of the REIT
vests in the REIT and the beneficiaries of the Regulations, though exceptions have been
Trust are the Unitholders of the REIT. made with respect to (i) hotels, hospitals and
convention centers forming part of
A REIT can only invest in real estate composite real estate projects, whether rent
properties located in India either directly or generating or income generating; and (ii)
through Holdcos or SPVs, with at least 80% common infrastructure for composite real
of the value of the REIT Assets being estate projects, industrial parks and SEZs.
invested in completed and rent and/or
02 What are the key laws applicable to REITs?

e key laws applicable to REITs include the
REIT Regulations, the REIT Guidelines, the
Trusts Act, the Registration Act, the ILDS
Regulations, the FEMA and the Income Tax
Act, 1961.
T
RElIations
03 Who are the parties to a REIT? Reg
u
e parties to a REIT are the Sponsor, the

Sponsor Group, the Trustee and the
Manager, each with distinct duties, roles and
responsibilities.

04 What are the various intermediaries involved in a public issue of a REIT?
e following intermediaries will be typically approvals from the Stock Exchanges.
appointed for a public issue of a REIT: e Merchant Bankers also assist with
co -ordinating road shows for
(a) Merchant Bankers marketing of the public Issue.
e Manager in consultation with the
Trustee is required to appoint at least e Merchant Bankers also have certain
one or more Merchant Bankers, post-Issue obligations such as filing of
registered under the Merchant Bankers monitoring rep or ts with S EB I,
Regulations, and at least one of them is redressal of investor grievances
required to be the lead Merchant including those in relation to refund,
Banker. e REIT is permitted to file allotments, dispatches and payment of
the Dra Offer Document only interest to applicants.
through a Merchant Banker.
(b) Registrar
e Merchant Bankers are expected to
exercise due diligence with respect to e Registrar in a public Issue of Units,
the disclosures made in the offer is required to:
documents and are required to submit a (i) accept application forms from
due diligence certificate to SEBI at the bidders in the public Issue;
following stages: (ii) p r o c e s s a p p l i c a t i o n f o r m s
(i) at the time of filing the Dra Offer received from Syndicate Members
Document with SEBI; or SCSBs;
(ii) at the time of filing the Offer (iii) co -ordinate the process for
Document with SEBI and the allotment of Units of the REIT;
Stock Exchanges; (iv) co-ordinate the process for refund
(iii) immediately before opening of of subscription amounts where
the Issue; and the Units are not allotted to the
(iv) at the time of submission of the applicants; and
final post-Issue report with SEBI. (v) accurately maintain physical and
electronic bid data for bids
Further, the Merchant Bankers advise received, including maintaining a
the REIT and Parties to the REIT on record of application forms
the appointment of other received.
intermediaries.
(c) Syndicate Members
e Merchant Bankers liaise with SEBI
and the Stock Exchanges throughout Syndicate members collect application
the listing process, including receiving forms from applicants during the Issue
final observations from SEBI and period, and enter details into the
receiving in-principle and final listing
electronic bidding system on the Stock into the electronic bidding system on
Exchanges and undertake preliminary the Stock Exchanges and undertake
verification prior to sending the preliminar y verification prior to
application forms to the Registrar to sending the application forms to the
the Issue. Registrar.
(d) Public Issue Banks (g) Advertising agency
Public issue banks are banks with In respect of a public Issue, an
whom the public issue accounts are advertising agency is responsible for
opened for the collection of application publicity, undertaking public relation
money from the escrow account and activities and providing requisite
ASBA accounts. information to the Merchant Bankers
to enable them to submit a compliance
(e) Escrow Collection Banks certificate with SEBI as specified under
An escrow collection bank acts as an the REIT Guidelines.
escrow ag ent in relation to the
application money received as a part of
the public Issue from non-ASBA
bidders (namely anchor investors and
strategic investors). e escrow account
is opened for collecting the application
money received from non-ASBA
bidders. An Escrow Collection Bank
also handles refunds of as applicable
amounts.
(f ) SCSBs, Registered Brokers, RTAs
and CDPs
SCSBs or Registered Brokers or
Registrar and Share Transfer Agents or
Collecting Depository Participants
collect application forms from bidders,
during the Issue period and enter details

05 What is the typical structure of a REIT?
Set out below is the typical structure of a REIT:
Sponsor and Unitholders

Sponsor Group
Manager Trustee
06 Is there a mandatory listing 07 How is the residential status

requirement under the REIT of a REIT determined from
Regulations? a FEMA perspective?
e REIT Regulations mandate that a REIT If either the Sponsor or the Manager is
must undertake an initial public offering of foreign owned or controlled, the REIT will
its Units within 3 years of receipt of its be categorized as a foreign owned and
certificate of registration from SEBI. A REIT controlled investment vehicle from a FEMA
which fails to do so would be required to perspective. Downstream investments by
surrender its certificate of registration and such a REIT shall have to comply with the
cease to operate as a REIT. investment conditions as per the extant
foreign exchange regulations.

08 What is the process for registration of a REIT?
e process for registration of a REIT Parties to the REIT; (ii) description of
comprises of the following steps: assets to be included under the REIT;
(iii) details of the business plan and
(I) Identification and appointment of the investment strategy; and (iv) details of
Trustee by the Sponsor(s); past regulatory action, if any, against
(ii) Formation of a trust under the Trusts the REIT, Parties to the REIT and each
Act and registration of the same under of their directors;
the Registration Act by the Sponsor(s); (v) Review of application by SEBI,
(iii) Identification and appointment of the addressing queries from SEBI, if any, on
Manag er by the Sponsor(s) and the application and incorporating
Trustee; comments received from SEBI;
(iv) Submission of application by the (vi) Submission of clarifications to SEBI;

Sponsor(s) with SEBI for registration and
of the REIT (in the prescribed format) (vii) Grant of registration certificate by
along with executed copies of the Trust SEBI.
Deed and the Investment Management
Ag reement. Some of the ke y
information to be included in the
application includes: (i) details of the
09 When is the Sponsor required 10 What are the conditions

to transfer real estate assets to attached to the revenue earned
the REIT? by a REIT?
e Sponsor is required to transfer the real At least 51% of the consolidated revenues of
estate assets (which constitute the initial the REIT, Holdco and the SPV, other than
assets of the REIT) to the REIT prior to the gains arising from disposal of properties,
allotment of Units in the public Issue. should arise from rental, leasing and letting
real estate assets or any other income
incidental to the leasing of such assets.

II. Offerings by
REITs
01 What are the various types of Units offerings that can be
undertaken by a REIT?
A REIT can undertake listing only through (c) qualified institutions placements; (d)
an initial public offer of its Units. e rights issues; and (e) bonus issues.
minimum size of such public offer should However, the REIT Regulations presently
be ` 2,500 million. do not provide the operational rules or
guidelines for undertaking such offerings
A listed REIT can undertake the following of Units by a listed REIT.
types of offerings of its Units: (a) follow-on
public offers; (b) preferential allotments;
02 Is a REIT permitted to have multiple classes of Units?

A REIT is not permitted to have multiple
classes of Units and no Unitholder is
permitted to enjoy superior voting or any
other rights over another Unitholder.
However, subordinated Units carrying
inferior voting or any other rights may be
issued to the Sponsor and its Associates.
03 What constitutes a public Issue of Units by a REIT?

What are the eligibility requirements and other important conditions
applicable to a public offer of Units by a REIT?
A public Issue of Units by a REIT is an issue (a) e REIT should be registered with
of Units to the public in which any person SEBI;
who is eligible to invest can participate. A
public Issue may be either a fresh issue or a (b) e value of REIT Assets should be at
combination of a fresh issue and an offer least `5,000 million; and
for sale. A REIT can only undertake a (c) e offer size should be at least `2,500
public Issue if it complies with the million.
following conditions :

04 What are the investment conditions applicable to REITs?
A REIT may only invest in Holdcos/SPVs
and/or properties or securities or TDR in
India in accordance with the REIT
Regulations and the investment strategy
disclosed in the Offer Document.
e investment conditions applicable to

REITs are as follows:
(a) A REIT shall not invest in vacant land

or agricultural land or mortgages
other than mor tg a g e backe d
securities.
(b) Not less than 80% of the value of the (v) unlisted shares of companies
REIT Assets shall be invested in deriving at least 75% of their
completed and rent and/or income operating income from real
generating properties. estate activities;
(c) Not more than 20% of the value of the (vi) government securities;
REIT Assets shall be invested in:
(vii) TDR/unutilized FSI of a project
(i) under-construction properties where the REIT has already
or completed and not rent made investment; and
generating properties whether
directly or through a company or (viii) money market instruments or
LLP; cash equivalents.
(ii) l iste d or un l iste d debt of (d) A REIT shall not invest in Units of
companies or Body Corporates other REITs.
in the real estate sector, excluding Further, additional investment conditions
investments made in the debt of may be applicable in case of foreign owned
the Holdco and/or SPV; and controlled REITs in accordance with
(iii) mortgage backed securities; the extant foreign exchange regulations.
(iv) listed shares of companies e above investment conditions are

deriving at least 75% of their required to be complied with at the time of
operating income from real filing of the Offer Document, and
estate activities; thereaer.

05 What is the minimum subscription required in a public Issue of the
Units of a REIT? Is there any requirement for minimum number of
investors for a public Issue?
A minimum subscription of 90% of the fresh

Issue size is required for a public fresh Issue.
Further, there should be at least 200 investors
participating in the public Issue. In the event
that minimum subscription of 90% of the fresh
Issue size is not received, the REIT would have
to refund the application money received from
prospective investors within a period of 12
Working Days from the Issue Opening Date,
failing which the Manager shall be liable to pay
interest at a rate of 15% per annum for the
period of delay.
06 Is there any minimum dilution required in a public issue?

e minimum percentage of Units required (c) If the post-Issue capital of the REIT
to be offered to the public in a public Issue is calculated at the offer price is equal to or
as follows: more than `40,000 million, then, at
least 10% of the Units shall be offered to
(a) If the post-Issue capital of the REIT
the public.
calculated at the offer price is less than
`16,000 million, then, at least 25% of In the event initial public shareholding is less
the Units shall be offered to the public; than 25% in accordance with (b) or (c) above,
the REIT shall be required to increase its
(b) If the post-Issue capital of the REIT
public shareholding to 25% within a period
calculated at the offer price is equal to or
of three years from the date of initial listing.
more than `16,000 million and less
For the above purposes, “public” refers to
than ` 40,000 million, then, such
persons other than related parties to the
percentage of Units equivalent to
REIT or any other person as may be specified
`4,000 million shall be offered to the
by SEBI.
public; and

07. Are Units required to be issued in dematerialised form?
Yes, Units of a REIT are required to be issued to applicants in dematerialized form only.
08. What are the corporate approvals required for public issue of Units in
India?
A public Issue of Units of a REIT requires the prior approval of the board of directors of the
Manager.
09. What is the ASBA mechanism?

ASBA is a mechanism prescribed by SEBI, which is required to be used in a public Issue of Units
by REITs, wherein the application money can be blocked in the bank account, details of which
are provided in the application form, until just prior to allotment of Units as opposed to the
application money being submitted along with the application form.
10. Is participation through ASBA mandatory?

e ASBA facility is mandatory in all public offers by REITs fee all investors other than anchor
investors and strategic investors.

III. Parties and
Intermediaries to
a REIT
01 Who is a Sponsor? What are the eligibility requirements for a Sponsor?
A Sponsor is any person who sets up the (b) e Sponsor or its Associates should
REIT and is designated as such at the time of have experience of at least 5 years in
making the application for registration to development of real estate or fund
SEBI. A REIT, being a trust, the Sponsor of a management in the real estate industry.
REIT is the author of the trust and is Further, if the Sponsor is a real estate
required to transfer the initial portfolio of developer, it should have developed at
assets to the REIT. least two projects; and
e key eligibility requirements for a (c) e Sponsor should be a fit and proper
Sponsor are as follows: person based on the criteria specified
un d er S c h e d u l e I I o f th e S E B I
(a) e Sponsor(s) are collectively required
Intermediaries Regulations.
to have a net worth of `1,000 million
provided that each sponsor has a Where the Sponsor is a developer, at least two
minimum individual net worth of `200 projects of the Sponsor should have been
million; completed.
02 What are the duties, roles and responsibilities of a Sponsor?

e rights, duties and responsibilities of a interest in the Holdco or the SPVs, or the
Sponsor include: ownership of the real estate project(s)
prior to allotment of Units.
(a) Establishing the REIT, identifying and
appointing the Trustee and the Manager Further, the Sponsor is subject to certain
and making an application to SEBI for lock-in requirements applicable to the Units
registration of the REIT; and held by it. For further details of the lock-in
requirements applicable to Units held by
(b) Transferring or undertaking to transfer
Sponsors, please see Section V, Question 13.
to the REIT, its entire shareholding or

03 What is a Sponsor Group?
Where the Sponsor is a Body Corporate, the Provided that of the entities identified as
Sponsor Group includes: Sponsor Group above only the following
persons or entities may be considered:
(a) Entities or persons which are controlled
by the Body Corporate; (a) who is directly or indirectly holding an
interest or shareholding in any asset,
(b) Entities or persons which control such
SPV or Holdco forming part of the
Body Corporate; and
REIT;
(c) Entities or persons which are controlled
(b) who is directly or indirectly holding
by persons identified in (b) above.
Units on a post Issue basis; or
Where the Sponsor is an individual, the
(c) whose experience is being utilised by the
Sponsor Group includes:
Sponsor for meeting any of the eligibility
(a) A n i mm e d i a t e r e l a t i v e o f s u c h criteria prescribed under the REIT
individual; and Regulations.
(b) Entities or persons which are controlled

by such individual.
04 Who is a Trustee? What are the eligibility requirements for a Trustee?

A trustee is a SEBI registered entity which (c)  e Tr uste e s h o u l d p o ss e ss th e
holds the REIT Assets in trust for the benefit infrastructure and personnel, etc. in
of the Unitholders. accordance with circulars or guidelines
sp e cifie d/issue d by S EB I to the
e key eligibility requirements for a Trustee
satisfaction of SEBI; and
are as follows:
(d) e Trustee should be a fit and proper
(a) e Trustee should be registered under
person based on the criteria specified
t h e S E B I D e b e n t u r e Tr u s t e e
un d er S c h e d u l e I I o f th e S E B I
Regulations;
Intermediaries Regulations.
(b) e Trustee should not be an Associate
of the Sponsor or the Manager;

05 What are the duties, roles and responsibilities of a Trustee?
e duties, roles and responsibilities of a prescribed under the REIT Regulations
Trustee include: and the REIT Guidelines;
(a) Appointment and removal of the (e) Reviewing the status of investor
Manager, subject to compliance with complaints and redressal thereof by the
REIT Regulations; Manager;
(b) Overseeing the activities of the Manager (f ) Making distributions to the Unitholders
in the interest of the Unitholders; in accordance with the REIT
Regulations; and
(c) Entering into the Trust Deed and
various other transaction documents on (g) Ensuring that the activities of the REIT
behalf of the REIT, including the are carried out in accordance with the
Investment Management Agreement; REIT Regulations, the Trust Deed and
the Offer Document.
(d) Ensuring compliance with various
reporting and disclosure requirements
06 Who is a Manager? What are the eligibility requirements for a Manager?

e Manager is responsible for undertaking (b) e Manager or its Associates should
investment decisions for the REIT, managing have at least 5 years experience in fund
the REIT Assets, undertaking or initiating mana g em ent , a dvi s or y s er vi c e s ,
activities related to general corporate aspects property management in the real estate
of a REIT (such as Unitholders’ meetings, industry or development of real estate;
redressal of investor grievances) and ensuring (c) e Manager should have at least two
compliance with the requirements of the key personnel, each having a minimum
REIT Regulations. o f 5 y e a r s e x p e r i e n c e i n f un d
e Manager may be a company, an LLP or a mana g em ent , a dvi s or y s er vi c e s ,
Body Corporate. e eligibility requirements property management in the real estate
for a Manager are as follows: industry or development of real estate;
(a) If the Manager is a Body Corporate or a (d) e board of directors (or governing
company, its net worth should not be less board of the LLP, as the case may be) of
than `100 million. If the Manager is an the Manager should consist of at least
LLP, its net tangible assets should not be 50% independent directors, and such
less than `100 million; independent directors should not be

directors (or members of governing person based on the criteria specified
board of LLPs) of any other REIT; and un d er S c h e d u l e I I o f th e S E B I
(e) e Manager should be a fit and proper Intermediaries Regulations.
07 What are the duties, roles and responsibilities of a Manager?

e duties, roles and responsibilities of the (c) Ensuring adequate and timely redressal
Manager include: of all Unitholders' grievances pertaining
to activities of the REIT;
(a) Making investment decisions with
respect to the REIT Assets including any (d) Undertaking all such other activities
future investment or divestment of delegated to it by the Trustee in terms of
REIT Assets; the Investment Mana g ement
Agreement; and
(b) Appointing various intermediaries with
respect to the activities of the REIT, in (e) Declaring distributions to Unitholders.
consultation with the Trustee, in a
timely manner;
08 Who are the key intermediaries involved in the operation of a REIT?
e key intermediaries involved in the operation of a REIT are the Valuers and Auditors.
09 What is an SPV/Holdco?
A REIT may hold assets directly, through an (b) which has made investments in other
SPV or through a two tier structure SPVs which ultimately hold the REIT
comprising of a Holdco and an SPV. assets;
A Holdco is an entity: (c) in which the REIT (acting through the
Manager) appoints such number of
(a) in which the REIT holds or proposes to
nomine e dire ctors which are in
hold at least 50% of the equity share
proportion to the shareholding or
capital or interest;
holding interest of the REIT in the
Holdco; and

(d) which is not engaged in any other (c) in which the REIT (acting through the
activity other than holding of the Manager) appoints such number of
underlying SPVs/real estate/properties nomine e dire ctors which are in
and any other activities pertaining to or proporation to the shareholding or
incidental to such holding. holding interest of the REIT/Holdco in
the SPV; and
An SPV is an entity:
(d) which is not engaged in any other
(a) in which either the REIT or the Holdco
activit y other than holding and
holds or proposes to hold at least 50% of
developing property.
the equity share capital or interest;
(b) which holds at least 80% of its assets
directly in properties and does not invest
in other SPVs;
10 Who is a Valuer? What are the eligibility requirements of a Valuer?

A Valuer may be any person, who is either a e Valuer should not be an Associate of the
“registered valuer” under Section 247 of the Sponsor, Manager or the Trustee, and should
Companies Act, 2013 or as specified by SEBI have at least 5 years experience in valuation of
from time to time and appointed by the real estate.
Manager, to undertake the valuation of the
REIT Assets in accordance with the REIT
Regulations.
11 What are the duties, roles and responsibilities of a Valuer?

e duties, roles and responsibilities of the (c) Disclosing to the REIT, any pending
Valuer include: business transactions, contracts under
negotiation and other arrangements
(a) Ensuring that the valuation of the REIT
with the Manager or any other party
Assets is impartial, true and fair in
whom the REIT is contracting with and
accordance with REIT Regulations;
any other factors that may interfere with
(b) Ensuring adequate and robust internal the Valuer's ability to provide an
controls to ensure the integrity of independent and professional valuation.
valuation controls; and

12 Who appoints the Auditor? What are the eligibility requirements and
scope of services provided by the Auditor?
e Auditor should be appointed by the certain for ward looking projections

Manager, for a period of not more than 5 including the assumptions, of the REIT
consecutive years. e Auditor (other than Assets that are owned or proposed to be
an individual) may be further reappointed owned by the REIT, in accordance with
for another 5 consecutive years, subject to REIT Regulations.
Unitholders’ approval in accordance with the
e Auditor is also required to prepare a
REIT Regulations. e audit of the REIT's
statement of special tax benefits, which is
financial statements should be conducted at
available to the REIT and its Unitholders.
least once every year.
Further, Auditors in public offerings are
e Auditor is required to audit and deliver a
typically required to deliver a ‘comfort letter’
report on the REIT's financial statements for
to the Merchant Bankers to the Issue at
inclusion in the Dra Offer Document,
various stages of the listing process, which
Offer Document and Final Offer Document.
relates to “negative assurances” or changes in
e report includes restated audited
certain line items aer the date of the last
combined financial statements prepared in
audit, and confirmations on the financial
accordance with applicable accounting and
data, statements and other financial and
auditing standards. e Auditor is also
operational data included in Dra Offer
required to subject itself to the peer review
Document, Offer Document and Final Offer
process of the ICAI and hold a valid
Document.
certificate issued by the Peer Review Board of
ICAI. e Auditor is required to certify
13 What are the duties, roles and responsibilities of an Auditor?
e duties, roles and responsibilities of the (b) Ensuring that the accounts and the
Auditor include: financial statements provide a true and
fair picture of the state of affairs of the
(a) Conducting an audit of the accounts of
REIT; and
the REIT and draing the audit report
based on the examination of such (c) Ensuring that the financial statements
accounts; comply with the applicable accounting
standards.

IV. Transaction
Documents
01 What are the disclosure documents prescribed by SEBI for the public
issue of Units? Are the disclosure documents subject to prior review by
SEBI or any other regulatory authority?
e disclosure documents prescribed by of the Offer Document with the designated

SEBI are the Dra Offer Document, the Stock Exchange and SEBI, and should be
Offer Document and the Final Offer made available for public comments for at
Document. e Dra Offer Document is least 21 days. Any comments provided by
submitted before the SEBI for their review SEBI on the Dra Offer Document are
and the public Issue is undertaken through re qu ire d to b e incorp orate d to the
Offer Document and Final Offer Document. satisfaction of SEBI before filing of the Offer
Document.
e Dra Offer Document is required to be
filed with SEBI at least 30 days prior to filing
02 What are the various transaction documents required for a REIT?

ere are two categories of transaction the Sponsor and the Trustee prior
documents that are required for a REIT, to the registration of the REIT
namely, (a) structure related transaction with SEBI. It sets out, amongst
d o c um ents ; an d ( b) l i sting re late d other things, the objectives of the
transaction documents. REIT and the powers, functions,
duties and responsibilities of the
(a) Str ucture related transaction
Trustee and the Manager.
documents
A copy of the executed Trust Deed
ese documents relate to setting up of
is required to be submitted to
the REIT, allocation of responsibility of
SEBI along with the application
various Parties to the REIT, transfer of
for registration of the REIT.
the initial portfolio of assets to the
REIT by the Sponsor/Sponsor Group (ii) I n v e s t m e n t M a n a g e m e n t
and the mechanism for utilizing cash Agreement
fl o w s o f t h e Ho l d c o / S P Vs f o r
distribution to the Unitholders. A brief e Investment Management
summary of the structure related A g re em ent i s entere d into
transaction documents is set out below: between the Trustee, acting on the
behalf of the REIT and the
(i) Trust Deed Manager prior to registration of
 e Tr u s t D e e d i s t h e the REIT with SEBI. It sets out,
constitutional document of a amongst other things, powers,
REIT. It is entered into between functions, duties, responsibilities

and liabilities of a Manager (iv) Shareholders' Agreements
including those prescribed under
the REIT Regulations and those As required under the REIT
delegated by the Trustee to the Regulations, where the REIT has
Manager in accordance with Holdcos/SPVs which are not
applicable law. 100% owned by the REIT, the
Holdco/SPVs will be required to
A copy of the executed Investment have in place an agreement which
Mana g ement Ag re ement is ensures that no other shareholder
required to be submitted to SEBI or partner of the Holdco or SPV
along with the application for shall exercise any rights that
registration of the REIT. prevents the REIT, Holdco or the
SPV from complying with the
(iii) Share Purchase Agreement or Asset
provisions of the REIT
Purchase Agreement
R e g u l a t i o n s . Fu r t h e r, t h e
e share purchase agreement or shareholders’ a g re ement or
the asset purchase agreement is partnership agreement shall
entered into for transferring the provide for an appropriate dispute
assets, or interest in the Holdco or resolution mechanism for
t h e S P Vs , a s a p p l i c a b l e , disputes between the
comprising the initial portfolio of REIT/Holdco and other
assets, from the Sponsor and/or shareholders / partners of the
Sponsor Group to the REIT. Holdco /SPVs, as applicable.
e share purchase agreement or e provisions of the REIT

the asset purchase agreement is Regulations shall prevail in case of
entered into amongst the Sponsor, inconsistencies between such
Sponsor Group, the Trustee, agreements and the obligations
acting on behalf of the REIT, the cast upon the REIT under the
Manager and the Holdco or if the REIT Regulations.
SPVs own the initial portfolio of (v) Debenture Subscription Agreement
assets, the SPVs. e Share
or Loan Agreement
Purchase Agreement or the Asset
Purchase Agreement is required Debenture subscription
to be finalized prior to filing the agreements or the loan agreement
Dra Offer Document. It is may be entered into for
typically executed before filing of establishing an efficient
the Offer Document and its mechanism to upstream cash
closing should occur prior to flows of the SPVs to the REIT.
allotment of Units in the public Such cash flows are then utilized
offer. to make distributions to the

Unitholders in accordance with intellectual property or name
the REIT Regulations. licensing agreement is not a
mandated requirement under the
e debenture subscription REIT Regulations or essential for
agreement or the loan agreement setting up and listing a REIT. It is
is entered into amongst the on l y re qu ire d i f th e R E I T
Trustee acting on behalf of the proposes to utilize any intellectual
REIT, the Manager and the SPVs, propert y of the Sponsor or
prior to the filling of the Offer Sponsor Group, such as its trade
Document with SEBI. name, trademark or logo.
(vi) Other Agreements Whilst the intellectual property
or name licensing agreement
In addition to the agreements set
needs to be finalized before filing
out above, some or all of the
of the Dra Offer Document (in
following agreements may also be
ca se of a public offer), the
required depending upon the
execution can be delayed until
structure of the REIT and factual
filing of the Offer Document.
assessment of the relationship
b e t we en th e R E I T a n d i ts l Non-Compete- Such an
Sponsor: arrangement may be entered into
l Shared Resources Agreement- A to restrict the Sponsor from
undertaking real estate projects
Shared Resources Agreement is
which compete with the REIT.
not a mandated requirement
under the REIT Regulations or l Deed of right of first offer or refusal-
essential for setting up and listing a Typically, the right of first offer or
REIT. It may be entered into if the refusal is provided by the Sponsor
REIT intends to continue its to the REIT in relation to real
reliance on the Sponsor for certain estate properties being developed
services, such as information by the Sponsor. Such arrangement
technology and human resources. enables the REIT to access a
Whilst the Shared Resources pipeline of assets to ensure
Agreement needs to be finalized continued existence of the REIT.
before filing of the Dra Offer It also ensures that the Sponsors
Document (in case of a public do not set-up competing REITs
offer), the execution can be with similar or same class of assets.
delayed until filing of the Offer e deed of right of first offer or
Document. refusal is entered into amongst the
l Intellectual property or name Sponsor and the Trustee, acting
on behalf of the REIT, and the
licensing agreement- An
Manager.

(b) Listing related transaction Registrar whereby the Manager is
documents required to appoint a Registrar to
the Issue. is agreement sets
(i) Issue Agreement forth the rights and obligations of
e issue agreement is entered the Registrar in the Issue process.
into among st the Merchant (iii) Advertising Agency Agreement
B a n ke r s , t h e Sp o n s o r, t h e
Manager and the Trustee acting e advertising agency agreement
on behalf of the REIT, prior to the is entered into amongst the
filing of the Dra Offer Manager, the Trustee, acting on
Document. It sets out, amongst behalf of the REIT, the Merchant
other thing s, the roles and Bankers and the advertising
responsibilities of the Merchant agency. It sets out the obligations
Bankers, the conditions precedent of the advertising agency, the
t o t h e M e r c h a n t B a n ke r 's Manager, the Trustee and the
obligations, representation and ser vices provided by the
warranties from the Trustee, the advertising agency for advertising
Manag er and the Merchant and media relations in respect of
Bankers, details of the indemnity the REIT.
provided by the Manager and the
Trustee to the Merchant Bankers (iv) Escrow Agreement
and provision for termination of e escrow agreement sets out the
the Merchant Bankers' arrangement for collection of
engagement. e obligations of application/bid amounts from
the Merchant Bankers are several non-ASBA bidders (namely
and not joint. e fee anchor investors and strategic
arrangement is typically governed investors). is agreement is
by an engagement letter entered entered into between the
into between the Manager (on Manager, the Trustee (acting on
behalf of the REIT) and each behalf of the REIT ), the
Merchant Banker. If the public Merchant Bankers, the syndicate
offer has an offer for sale members, the escrow banks and
component, the selling the Registrar. is agreement also
Unitholders are also made party provides for the manner by which
to the issue agreement. the funds in the escrow accounts
(ii) Registrar Agreement are transferred to the refund
account or the public offer
e r e g i s tr a r a g r e e m e nt i s account, as applicable.
entered into among st the
Manager, the Trustee, acting on (v) Underwriting Agreement

e underwriting agreement is
entered into among st the
Manager, the Trustee, acting on
underwriters aer determination
of the price and allocation of the
Units, but prior to the filing of the
Final Offer Document. Under the
t erms o f th e un d er wri ti n g
agreement, the underwriters agree
to ensure payment with respect to
th e Un i t s a l l o c a t e d t o
Unitholders procured by them
and, in the event of any default in
payment, the respective
underwriter is required to procure
purchasers for, or purchase, the
Un i ts to th e e xtent o f th e
defaulted amount. It also includes
among other things, conditions
precedent to the individuals'
obligations, representations and
certain covenants by the Manager
and the indemnity provisions.

V. Process for Issue
and for Listing
01 What is the process for public listing of Units?
Set out below are the indicative steps and details, please see Section IV,
process for public listing of Units, which has Question 2)
been divided into six stages:
Typically, whilst the agreement
(a) Pre- ling of the Draft Offer for acquisition of initial portfolio
Document of assets (i.e. Share Purchase
• Ap p o intm ent o f Merc ha nt Agreement or Asset Purchase
Bankers and legal counsels Agreement) will be executed prior
to the filing of the Offer
• Identification of the REIT Assets, Document, the closing of the
the Trustee and the Manager transaction would occur
• Kick-off meeting where the senior subsequently, before allotment of
management provides an Units. Similarly, typically, the
overview of the proposed REIT closing of debenture subscription
portfolio and its business to the agreement or loan agreement
Merchant Bankers and the legal between the SPV and the REIT
counsels and the REIT timelines would occur aer receipt of final
are discussed listing and trading approval of the
Units.
• Preparation of the data room
(b) Filing of the Draft Offer Document
• Commencement of due diligence
exercise, simultaneously with • Executed standard certificates are
commencement of draing of the provided by the Trustee, the
Dra Offer Document Manag er, Sponsor, Sponsor
Group and their respective
• Submission of application (along directors and associates and
with executed copies of the Trust e xe c ut e d c o m f o r t l e t t er i s
D e e d a n d t h e In v e s t m e n t provided by the auditors to the
Management Agreement) for Merchant Bankers
grant of certification of
registration by SEBI • Execution of issue agreement
• Receipt of comments from SEBI, • Filing of the Dra Offer
if any on the application Document with SEBI along with
due diligence certificate by the
• Receipt of certificate of Merchant Bankers
registration of REIT from SEBI
• Filing of application with the
• Finalization of the structure Stock Exchanges for grant of in-
related transaction documents principle approval for listing and
a n d c er ta in l i sting re l ate d trading of the Units
transaction documents ( for

(c) SEBI review and receipt of nal Anchor Investors, one day prior to
SEBI Observations the Bidding Period for all other
• Replying to the interim bidders.
observations received from SEBI • Opening of the Bidding Period for
on the Dra Offer Document subscription by all investors
• Receipt of final observations from • Bidding Period to b e for a
SEBI minimum of 3 days and a
(d) Post nal SEBI observation and maximum of 30 days
ling of the Offer Document • Bidding closes
• Filing the reply to the final (f ) Post-Issue period
observations received from SEBI
along with an updated Dra Offer • e Registrar to get bid details
Document from the Stock Exchanges
• Receipt of SEBI approval for the • e Manager, in consultation

updated Dra Offer Document with the Merchant Bankers to
determine the Issue price
• Execution of escrow agreement,
syndicate agreement and strategic • Finalization of the Issue price and
investor unit and subscription filing of the Final Offer
agreement, if any Document with SEBI and the
designated Stock Exchange and
• Updated standard certificates and execution of the underwriting
comfort letter to be provided by agreement
the relevant persons
• e Registrar to submit final basis
• Filing of the Offer Document of allotment to the designated
with SEBI and the designated Stock Exchange
Stock Exchange and obtaining
approvals from SEBI and the • e Registrar and Merchant
designated Stock Exchange Bankers to issue funds transfer
instructions to collecting banks
(e) Issue period and SCSBs for credit of funds into
• Announcement of the floor price the public offer account
or price band at least 5 Working • Manager to allot the Units and
Days before the opening of the credit the Units to the successful
Issue bidders
• Opening of the Issue at least 5 • Designated Stock Exchange to
Working Days aer the date of provide final listing and trading
filing of the Offer Document with approvals
SEBI
• Trading commences
• Opening of the Bidding Period for
02 Are the investors categorized? If yes, how are Units allocated amongst
different categories?
Investors are categorized into: (a) Institutional Investors and (b) other investors. e allocation
in the public offer shall be made as follows:
(a) Not more than 75% to Institutional Investors.
(b) Not less than 25% to other investors.
03 Who are Institutional Investors?

An Institutional Investor includes: Bank of India or intermediaries
registered with SEBI, with net-worth of
(a) a QIB; and
more than ` 5,000 million, as per the last
(b) family trust or systematically important audited financial statements.
NBFCs registered with the Reserve
04 What is the process of issue of Units to Anchor Investors?

(a) In terms of the Issue, 75% of the Issue (ii) minimum of 5 Anchor investors for
shall be available for allocation to allocation of more than `2,500
Institutiona l Investors on a million.
proportionate basis. e Manager, in
(d) If the price fixed as a result of book
consultation with the Merchant
building is higher than the price at
Bankers, may allocate up to 60% of the
which the allocation is made to Anchor
Institutional Investor portion to
Investors, the Anchor Investor shall
Anchor Investors.
bring in the additional amount within 2
(b) An Anchor Investor shall make an days of the date of closure of the Issue.
application of a value of at least `100 However, if the price fixed as a result of
million in the Issue. book building is lower than the price at
which the allocation is made to Anchor
(c) Allocation to Anchor Investors shall be
Investors, the excess amount shall not be
on a discretionary basis and subject to
refunded to the Anchor Investor and the
the following:
Anchor Investor shall be allotted Units
(i) minimum of 2 Anchor Investors for at the price at which allocation was made
allocation up to ` 2,500 million; and to it.

(e) Neither the Merchant Bankers nor any the Merchant Bankers or Alternate
associate of the Merchant Bankers, other Investment Funds (AIFs) sponsored by
than mutual funds sponsored by entities the entities which are associate of the
which are associate of the Merchant Merchant Bankers or FPIs other than
Bankers or insurance companies Category III sponsored by the entities
promoted by entities which are associate which are associate of the Merchant
of the Merchant Bankers or pension Bankers, shall apply under the Anchor
funds of entities which are associate of Investors category
05 What is the process for issue of Units to Strategic Investors?

(a) Strategic Investor(s) may, either jointly determined in the Issue. If the price
or severally, invest not less than 5% and determined in the public Issue is higher
not more than 25% of the total Issue size. than the price at which the allocation is
to be made to Strategic Investor(s), the
(b) e Manager on behalf of the REIT, is
Strategic Investor(s) shall bring in the
required to enter into a binding unit
additional amount within two working
subscription agreement with the
days of the determination of price in the
Strategic Investor(s), which propose(s)
public Issue. However, if the price
to invest in the public issue of REIT
determined in the public Issue is lower
setting out the subscription price per
than the price at which the allocation is
unit, payable by the Strategic Investor.
to be made to Strategic Investor, the
e unit subscription agreement may
excess amount shall not be refunded to
not be terminated except in the event the
the Strategic Investor and the Strategic
i s s u e f a i l s t o c o l l e c t m i n i mum
Investor shall take allotment at the price
subscription.
at which allocation was agreed to be
(c) e entire subscription price is required made to it in un it subscription
to be deposited in a special escrow agreement.
account prior to opening of the public
(e) e Dra Offer Document or Offer
Issue
Document, as applicable, shall disclose
(d) e price at which the Strateg ic deta ils of the un it subscription
Investor(s) has/have agreed to buy Units agreement.
shall not be less than the issue price

06 What is a ‘con rmation of allocation note’?
Confirmation of allotment note or the CAN the allocation of Units to such investors. e
is the advice or intimation of allotment of CAN is not a statutory requirement;
Units of the REIT sent to anchor investors or however, it is used to confirm the sales by the
strategic investors, as applicable, confirming Syndicate Members.
07 What are the methods of pricing of Units?

Pricing of Units is typically undertaken envisage a fixed price issue where the price of
throug h the book building process. Units is fixed by the Manager in consultation
However, the REIT Regulations also with the Merchant Bankers.
08 What is book building?

e Securities and Exchange Board of India elicit demand, and to assess the price for
( Issu e o f Cap i ta l an d D i s c l o sure determination of the quantum or value of
Requirements) Regulations, 2018, defines securities proposed to be issued by the issuer.
‘book building’ as a process undertaken to
09 How are bids collected in book building?

During the specified period, investors submit amount equivalent to the Bid amount will be
a bid cum application form to the SCSBs, blocked by the SCSBs in the bank account
members of the Syndicate, Registered specified in the bid cum application form.
Brokers, CDPs and RTAs, indicating the
 e S C S Bs , Sy n d i c at e Mem b er s o r
number of Units and the price within the
Registered Brokers enter such Bid option of
price band at which they wish to subscribe to
each Bidder into the electronic bidding
the Units of the REIT.
system as a separate Bid.
Each bid cum application form gives the
Aer determination of the price, the
Bidder the choice to Bid for Units at a price
maximum number of Units Bid for by a
within the price band and specify the number
Bidder at or above the price is considered
of Units Bid for against each such price.
for allocation and the rest of the Bids,
Bid amounts collected are deposited in the irrespective of the Bid price, are
escrow account in terms of the escrow automatically rejected.
agreement or in case of ASBA bids, an

10 When is the allotment of Units required to be completed in case of a
public offer?
e allotment of Units and their listing on Stock Exchanges should be completed within 12
Working Days of the Issue Closing Date.
11 What are the lock-in requirements?

In terms of the REIT Regulations, lock-in prior to the initial offer (including the
requirements are of three types: (i) that Unitholding of the Sponsor exceeding
which applies to the Sponsor/Sponsor minimum lock-in requirement); and (iii)
Group of the REIT; (ii) that which applies to that which applies to Anchor Investors and
all Unitholders holding Units of the REIT Strategic Investors in public offers.
12 What are the lock-in requirements applicable to the Sponsor and

Sponsor Group of the REIT?
In terms of the REIT Regulations, the Group is required to collectively hold at least
Sponsors and Sponsor Group are required to 15% of the total Units of the REIT at all
collectively hold at least 25% of the post- times.
Issue capital of the REIT for a period of 3
years from the date of listing. Inter-se transfers amongst the Sponsors and
the Sponsor Group are not subject to lock-in.
Any Units held by the Sponsor/Sponsor However any transfer of Units by the
Group in excess of the Sponsor/Sponsor Sponsor and Sponsor Group below the 5%
Group contribution, are required to be and 15% individual and collective thresholds
locked in for a period of 1 year from the date shall be permissible only post 3 years from the
of listing. Further, each Sponsor is required date of listing of the Units, subject to
to hold at least 5% of the total Units of the additional conditions prescribed under the
REIT at all times, and the Sponsors/Sponsor REIT Regulations.

13 What are the lock-in requirements applicable to any person other
than the Sponsor and Sponsor Group who has been holding Units of
the REIT prior to the initial offer?
e lock-in requirement for any person other period of 30 days from the date of allotment
than the Sponsor, and Sponsor Group who in the public offer. Further, the Units allotted
has been holding Units of the REIT prior to to Strategic Investors, are required to be
initial offer is one year from the date of listing locked in for a period of 180 days from the
of the Units. date of listing in the public offer.
Additionally, Units allotted to Anchor
Investors are required to be locked in for a

VI. Disclosure
Requirements
01 What are the disclosure standards applicable in India?
Disclosure standards in India for the Offer In this respect, the key governing principle
Documents issued by REITs are substantially under the REIT Regulations is that all
at par with other securities markets in the disclosures made in the Offer Documents
world. Presently, the disclosure requirements must contain material, true, fair and
are governed by the REIT Regulations and adequate disclosure to enable the investors to
the REIT Guidelines, in case of public issues make a well informed decision. Additionally,
of REITs. However, they are continuing to the Offer Documents should not: (i) be
evolve based on, amongst other things, misleading or contain any mis-statements; or
regulatory evaluation and feedback from (ii) guarantee returns to the investors.
stakeholders including prospective investors.
02 What are the key areas of disclosures in Offer Documents?

In addition to the customary key areas such as (e) Description of the REIT Assets,
the business and market overview of the including specific disclosures in respect
REIT, risk factors (internal and external to of leased out and under construction
the REIT), financial statements of the REIT, properties;
management’s discussion and analysis of
(f ) Financial statements of the Sponsor and
financial condition and results of operation,
Manager;
other key disclosure requirements under the
REIT Regulations include: (g) Investment strategy of the REIT;
(a) Comprehensive details pertaining to (h) Projections of income of the REIT;
the Sponsor, Manager, Trustee and
other parties; (i) Disclosures on title of the REIT Assets
including any material litigations
(b) Brief backg round of the R EIT, pertaining to the REIT Assets;
including, the REIT structure and
d e s c r i p ti o n a n d d e ta i l s o f a ny (j) Disclosures on the status of approvals
a rr a ng em ent p er ta in ing to th e with respect to the REIT Assets and
underlying REIT Assets; approvals periodically required for the
REIT Assets;
(c) Cap i ta l str u c ture o f th e R E I T
including any borrowing or deferred (k) Details of material litigations and
payments and the borrowing policies; regulatory actions which are pending
against the REIT, the Sponsor, the
(d) Details of any related party transactions Mana g er and their resp e ctive
along with the procedure for dealing Associates and the Sponsor Group, the
with such transactions; Trustee and the Valuer, as specified;

(l) Comprehensive details on the rights of
Unitholders; and
(m) Auditors report and any sector-specific
report.
03 What are the disclosure requirements for the objects for which the
Issue is proposed?
e REIT Regulations do not prescribe the object, the issuer will be required to
detailed requirements for disclosures related provide comprehensive details of the
to objects. Listed business trust structures utilization of funds proposed to be raised in
typically utilize issue proceeds for the the Issue and the basis on which such amount
acquisition of Assets. REITs are expected to has been determined so as to ensure that the
frame similar use of proceeds and would substantive disclosure norms of SEBI are
accordingly need to include disclosures satisfied in letter and spirit.
regarding consideration for acquisition of
the initial portfolio of assets. Regardless of
04 What are the disclosure requirements for the directors and key managerial
personnel of the Manager and the Trustee?
Brief profiles of the directors of the Manager

and the Trustee are required to be disclosed.
In addition, the details of the Units held by
the directors of the Manager are required to
be disclosed.

05 What are the litigation related disclosures in the registration
application and the Offer Documents?
Litigation related disclosure requirements at (c) Brief description of material litigation

the time of applying for registration of the and regulatory actions pending against
REIT extend to the REIT, Sponsor, the Sponsor and its Associates, if any;
Manager, Trustee, Sponsor Group, their
(d) Brief description of material litigation
directors or members of the governing board
and include:
the Manager and its Associates, if any;
(a) L i ti g ati o n c o nn e c t e d w i th th e
(e) Brief description of material litigation
securities market which may have an
adverse bearing on the business of the
the Trustee, if any;
REIT or any order passed against such
persons for violation of securities laws; (f ) Brief description of material litigation
(b) Disciplinary action taken by SEBI or
the Valuer, if any; and
any other regulatory authority; and
(g) Brief description of material litigation
(c) Refusal of registration or suspension of
registration by SEBI.
the Sponsor Group, if any.
e litigation related disclosures in Offer
Documents pertaining to the Parties to the e Associates of an entity would inter-alia
REIT, the REIT and the REIT Assets are as include any person exerting significant
follows: influence over such entity, any person
controlling or controlled by such entity and
(a) Details of any material litigations any other entity with a common promoter.
pertaining to the REIT Assets;
(b) Brief description of material litigation
the REIT and its Associates, if any;
06 What nancial statements are to be included in Offer Documents?

In terms of the REIT Regulations, Offer months before the date of the Offer
Documents are required to include financial Document, the REIT is also required to
information for a period of last 3 completed disclose interim financial information.
financial years. If the closing date of the last
If a REIT is already in existence for the last 3
completed financial year is more than 6
completed financial years, its historical
financial statements on both, standalone and

consolidated basis are required to be disclosed in the Offer Documents (along
disclosed. However, where a REIT is in with related assumptions and as certified by
existence for less than 3 years, combined the REIT’s Auditors) for a period of the
financial statements of the REIT are required following 3 years.
to be disclosed. e consolidated or
Additionally, the summary audited financial
combined financial statements, as well as the
statements of the Mana g er and the
interim financial information, as applicable,
Sponsor(s) for the previous three years are
should be prepared in accordance with Ind
required to be disclosed. e financial
AS.
information of the Sponsors and Managers
Further, projections of income and operating shall be presented as per IGAAP or Ind AS
cash flows of the REIT are also required to be depending on the stage of transition of the
relevant entity (from IGAAP to Ind AS).
07 What are the disclosure requirements in respect of valuation of a REIT?
A summary of the valuation report, valuation disclosures in respect of valuation of assets

methodology, and frequency of valuation will be required in case of any related party
and declaration of NAV should be disclosed transactions entered into prior to making the
in the Offer Documents. However, adequate Issue.
08 What are the consequences of misstatements in Offer Documents?
Any misstatements in the Offer Documents more actions specified therein, including any
are considered as a contravention by the action provided under the Securities and
Manager, the Sponsor(s) and the Merchant Exchange Board of India (Intermediaries)
Bankers of the REIT Regulations and REIT Regulations, 2008.
Guidelines, and they may be liable for one

09 What role does SEBI play in relation to misstatements?
As per the REIT Regulations, a REIT or specified therein. Further, in terms of the
Parties to the REIT or any other person SEBI Act, penalty proceedings can also be
involved in the activity of the REIT who initiated by SEBI with regard to any
contravene the SEBI Act, the REIT contraventions of the SEBI Act, or any
Regulations, the REIT Guidelines or regulations or guidelines is issued there
notifications or instructions issued there under.
under, shall be liable for one or more actions
10 What is the liability of intermediaries associated with an initial

public offering of Units for misstatements and omissions in the
Offer Documents?
e Merchant Bankers are required (under under which they are registered with SEBI.
the REIT Regulations) to submit a due
e REIT Regulations further provide that
diligence certificate to SEBI at various stages
any contravention of any provisions of any of
of the listing process with respect to the
the regulations or guidelines or circulations
contents of the offer documents and could
thereof, issued by SEBI, by the
therefore be held liable by SEBI. Moreover,
intermediaries, shall be liable for one or more
the responsibility of the Merchant Bankers
actions as specified therein and any action
with respect to due diligence shall continue
provided under the SEBI Intermediaries
even aer the completion of the Issue
Regulations and the Merchant Banker
process.
Regulations.
Separately, all intermediaries can be held
liable under the applicable SEBI regulations
11 Can private action be initiated for misstatements?

Yes, any person or group of persons who have fraudulent conduct may approach any court
sustained any loss or damage due to with appropriate jurisdiction in order to
misstatements in the Offer Documents or claim compensation for such loss or damage.

VII. Corporate
Actions
01 What are the corporate approvals required by the Sponsor, Manager
and the Trustee for the public issue of Units of the REIT?
Approval of the board of directors of the activities related to the public issue of Units
Sponsor shall be required for setting up the of the REIT, such as approval of the Dra
REIT, appointing the Trustee and Manager Offer Document, the Offer Document and
and filing of the application with SEBI for the Final Offer Document and execution of
registration of the REIT. Approval of the various agreements in relation to the Issue.
board of directors of the Sponsor and the ese authorizations will be required at
Manager shall be required for undertaking a various stages in the transaction, including at
public issue of Units of the REIT. Further, the time of making the application to SEBI
the approval of the board of directors (or a for registration of the REIT, filing the Dra
duly constituted committee thereof ) of the Offer Document, the Offer Document and
Manager shall be required for various the Final Offer Document or allotment of
Units .
02 What are the approvals required for transfer of assets by the

Sponsor to the REIT?
Each Sponsor would require the approval of development authorities, SEZ BoA etc. and
its board of directors for transfer of the initial issuance of Units by the REIT may require
portfolio of assets. Moreover, depending approvals from the RBI. Such approvals
upon the materiality of the assets being would include those related to any transfer
transferred by the Sponsor, shareholders’ restrictions applicable to the assets or the
approval may also be required by the SPVs, imposed by relevant regulatory
Sponsor. e transfer of the initial portfolio authorities, any restrictions under licenses
of assets may also require third party and approvals applicable to the assets or the
approvals, depending upon regulatory SPVs, any restrictions under financing
restrictions, if any, and contractual agreements and any restrictions imposed by
arrangements entered into by the Sponsor. the private equity investors, if any, in the
Transfer of assets may additionally require Sponsor or the SPVs.
a p p r o va l s f r o m sp e c i fi c r e g u l a t o r y
authorities such as the state specific land

03 What are the key corporate governance requirements applicable to the
REIT or its Manager?
In accordance with the REIT Regulations, of all Unitholders, and to address any
50% of the board of directors of the Manager conflicts of interest with the Sponsor. ese
should comprise of independent directors structures include constitution of various
and such directors should not be directors or committees such as audit committee and
members of the governing body of another investment committee, and instituting
REIT. Further, though not mandated, the policies in relation to related part y
Manager may be expected to put in place transactions and conflicts of interest.
governance structures to ensure independent
decision making, which is in the best interest
04 Are there any speci c requirements regarding the composition of the

board of directors of the Holdco/SPVs?
In accordance with the REIT Regulations, applicable, which are in proportion to the
the Manager, in consultation with the shareholding or holding interest of the
Trustee, is required to appoint such number REIT/Holdco in the Holdco/SPV, as the
of nominees on the board of directors or the case may be.
governing board of the Holdco/SPV, as

VIII. Certain Post-
Issue Considerations
01 What are the reporting requirements applicable to a REIT?
e reporting requirements applicable to a profit and loss, statement of net assets at fair
R E I T a r e s e t o u t un d e r t h e R E I T va l u e a n d s tat em ent o f c ha n g e s i n
Regulations and the Continuous Disclosures Unitholders’ equity, the REIT is also
Circular, and state that the Manager shall (i) required to disclose, inter alia, (i) statement
submit an annual report to Unitholders and of net distributable cash flows of the REIT as
to the designated Stock Exchanges; and (ii) well as of the underlying Holdcos and SPVs;
submit a half-yearly report to the designated (ii) fees paid to the Manager and whether
Stock Exchanges. Such annual and half yearly there have been any material changes in the
reports shall contain disclosures as specified fees paid; (iii) changes in accounting policies
under the REIT Regulations, including a of the REIT; (iv) statement of earnings per
brief report of activities of the REIT and Unit; and (v) statement of related party
summary of the audited consolidated transactions.
financial statements for the year of the REIT.
Further, the Manager shall disclose to the
e REIT is required to submit to the designated Stock Exchang es, any
designated Stock Exchanges (i) the financial information having a bearing on the
information for the first half year period of operation or performance of the REIT as well
the financial year; (ii) the annual financial as price sensitive information, such as details
information ; and ( iii) the financia l of any borrowing of the Holdco or the SPVs
information for the second half year period or, acquisition or disposal of any assets.
of the financial year, which should be
submitted along with the annual financial
information.
e financial information of the REIT
should be disclosed on both a standalone as
well as a consolidated basis. e annual
financial information should contain
comparative information for the
immediately preceding year and the half
yearly financial information should contain
comparative information for the ( i)
immediately preceding half year; and (ii)
corresponding half year in the immediately
preceding financial year.
In addition to certain ke y financial
statements that need to be disclosed by the
REIT, such as the balance sheet, statement of

02 Are there any regulations governing insider trading?
All listed companies are required to comply insiders, as defined under the Insider
with the Insider Trading Regulations with Trading Regulations; and
respect to treatment of unpublished price
(b) Code of practices and procedures for
sensitive information. Accordingly, each
fair disclosure of unpublished price
listed company is required to formulate the
sensitive information.
following:
Similar requirements are expected to be
(a) Code of conduct for regulating ,
applicable to REITs.
monitoring and reporting of trading by
03 What are the distribution requirements applicable to a REIT?
A REIT is required to distribute at least 90% year in the manner disclosed in the Offer
of its net distributable cash flows to its Document.
Unitholders. Furthermore, the SPVs are
In addition to the periodic distributions
required to distribute at least 90% of their net
specified above, if any real estate asset is sold
distributable cash flows to the REIT, or, if
by the REIT or holdco or SPV or if the equity
applicable to the Holdco. In case of a two-
shares or interest in the holdco/SPV are sold
tiered structure of a REIT, the Holdco is
by the REIT, then, at least 90% of the
required to distribute to the REIT (i) 100%
proceeds of such sale are required to be
of the cash flows received by it from the SPVs;
distributed to the Unitholders, unless such
and (ii) 90% of the net distributable cash
proceeds are proposed to be re-invested in
flows generated by it.
other real estate assets within a period of 1
Such distributions shall be declared and year.
made once every 6 months in every financial

IX. Publicity and
Research
A. PUBLICITY
01 What are the publicity restrictions applicable in India?
e REIT Regulations and the REIT have to contain prescribed disclaimers

Guidelines prescribe publicity restrictions informing the public about the
applicable to a REIT undertaking a public proposed public Issue;
Issue of its Units.
(f ) Factual information about the business
e publicity restrictions in India are of the REIT may be answered over
applicable to the REIT as well as certain unsolicited telephone inquiries from
other persons, as set out in Section IX, the press, consistent with past practice,
Part A, Question 2. e publicity restrictions but any statements concerning the
include the following: proposed Issue should be avoided;
(a) All public communications should only (g) One-on-one meetings with investors,
contain factual information and should especially at conferences should not be
not contain conjectures or any matter conducted;
extraneous to the contents of the Dra (h) ere should not be participation in the
Offer Document, the Offer Document preparation and distribution of
and the Final Offer Document; research reports or analysis;
(b) No interviews with the media should be (i) It should be ensured that there is no
scheduled, nor any responses should be mention of the Issue in any form on
made to queries from the media, their websites; and
without consulting the legal counsels;
(j) All information on their websites
( c) In case of any previously scheduled s h o u l d b e c o n s i s t e nt w i t h t h e
interviews, no information regarding disclosures in the Dra Offer
the public Issue should be discussed; Document, the Offer Document and
(d) Any public communication should not the Final Offer Document.
contain statements which promise or
guarantee rapid increase in profits,
yields or returns;
(e) All advertisements issued by the REIT
from the period of filing the Dra Offer
Document until the listing of the Units

02 To whom are the publicity 03 What are the periods during
restrictions applicable? which the publicity restrictions
become applicable?
Publicity restrictions are applicable to the
REIT, the Sponsor, the Sponsor Group,
e publicity restrictions are applicable in
Manager, Trustee and their respective
relation to a public Issue by a REIT from the
directors, subsidiaries, Holdcos, SPVs,
date of the meeting of the board of directors
Associates of the REIT and persons acting on
of the Sponsor or the Manager approving the
their behalf, including public relations,
public offer or the date of registration of the
marketing or advertising agencies and
REIT with SEBI, whichever is earlier. e
financial advisors.
publicity restrictions would continue to be
applicable up to the date of allotment of
Units being offered or issued in the public
issue.
04 What are the various advertisements that are required to be released in

a public issue of Units of a REIT?
e various advertisements required to be (d) e public issue closing advertisement

released during the public issue of Units of a which may be published prior to the
REIT are: Issue Closing Date; and
(a) e pre-Issue advertisement, which is (e) e basis of allotment advertisement
required to be published post filing of which is required to be published
the Offer Document with SEBI and the within ten days from date of
Stock Exchanges and prior to the Issue completion of activities in relation to
Opening Date; the Issue and prior to listing of the
Units.
(b) e price band advertisement, which is
required to be published at least 2
Working Days b efore the Issue
Opening Date;
( c)  e p u b l i c i s s u e o p e n i n g
advertisement, which may be published
prior to the Issue Opening Date;

B. RESEARCH
01 Are there any laws applicable to research analysts?
Yes, the SEBI Research Analyst Regulations dissemination of research reports in relation
are applicable to research analysts and to public issue of Units by a REIT.
primarily govern the preparation and
02 To whom are the Research Analysts regulations applicable?

e SEBI Research Analyst Regulations are ( c) Associates of the REIT;
applicable to:
(d) all persons acting on behalf of the
(a) the REIT; REIT; and
(b) the Sponsor, Manager and Trustee of (e) the Merchant Bankers, Connected
the REIT, as well as their respective Analysts, Syndicate Members and their
directors and Associates; respective affiliates and Associates.
03 What are the restrictions applicable to research reports?

Certain guidelines and procedures in REIT and should be independently
relation to preparation and distribution of produced;
research reports are set forth below:
( c) e source of the information shall be
(a) e Merchant Bankers or their affiliates clearly acknowledged;
should not distribute a research report
(d) e research reports should also not
anywhere in the world if anyone
contain any valuations or recommen-
responsible for the preparation of such
dations in relation to the securities of
research report has had access to, or is in
the companies;
possession of, material information
(whether or not reflected in the (e) e research reports must not contain
research report) that is not known to any reference to the Issue or any
the public and will not be included in information about the Issue; and
Dra Offer Document, Offer
Document and Final Offer Document; (f ) e research reports shall be reviewed
by the counsels to the Merchant
(b) e research report should be, and Bankers prior to their publications.
present itself as, an outsider’s view of the

X. Issue of Debt
Securities
01 What are the guidelines applicable to REITs issuing debt securities?
Pursuant to the SEBI circular dated April 13, accordance with the provisions of the
2018 (ref no. SEBI / HO / DDHS / DDHS Companies Act;
/ CIR / P / 2018 / 71), REITs are permitted
(iii) e compliances required to be made
to issue debt securities by following the
under the Companies Act or any filings
provisions of the SEBI (Issue and Listing of
to be made to the ROC shall not apply
Debt Securities) Regulations, 2008, subject
to REITs for issuance of debt securities,
to the following:
unless specifically provided in the SEBI
(i) e REIT may issue debt securities for circular; and
providing loan to or acquisition of
(iv) In case of conflict bet we en the
shares of any person who is part of the
provisions of the REIT Regulations and
same group or who is under the same
the SEBI (Issue and Listing of Debt
management;
Securities) Regulations, 2008, the
(ii) e REIT will not be required to create R E I T R e g u l ati o ns o r c irc u l a r s
a debenture redemption reserve in thereunder shall prevail.
02 Who may be appointed as a 03 What is the security required

trustee for the debt issue? to be created for a debt issue?
For the issuance of debt securities, the REIT Any secured debt securities are required to be
shall appoint one or more debenture trustees secured by the creation of a charge on the
registered with SEBI under the Securities assets of the REIT or Holdco or SPVs, having
and Exchange Board of India (Debenture a value which is sufficient for the repayment
Trustee) Regulations, 1993. However, the of the amount of such debt securities and
Trustee to the REIT shall not be eligible to be interest thereon.
appointed as a debenture trustee to such issue
of debt securities.
04 What are the additional disclosure requirements for a REIT which has
issued debt securities?
A REIT which has issued debt securities is (i) Intimations to sto ck exchang es
required to comply with the following (Regulation 50 of the LODR);
additional continuous disclosure
(ii) Disclosure of information having
requirements:
bearing on the performance/operation

of listed entity and/or price sensitive (ix) Record date for payment of interest
information (Regulation 51 of the (Regulation 60 of the LODR);
LODR);
(x) Disclosure of additional line items such
(iii) Maintenance and disclosure of asset as asset cover available, debt-equity
cover (Regulation 54 of the LODR); ratio, debt service coverage ratio,
interest service coverage ratio and net
(iv) Review of credit rating (Regulation 55 worth;
of the LODR);
(xi) Opinions in audit reports having a
(v) Providing documents and intimations bearing on the interest payment or
to debenture trustee (Regulation 56 of redemption or principal repayment
the LODR); capacity shall be appropriately and
(vi) S u b m i t t i n g c e r t i fi c a t e s a n d adequately discussed by the Manager
undertakings to stock exchanges while publishing the accounts; and
(Regulation 57 of the LODR); (xii) e REIT shall submit to the stock
(vii) Providing documents and information exchanges on a half yearly basis, along
to holders of debt securities with the half yearly financial
(Regulation 58 of the LODR); statements, a statement indicating
material deviations, if any, in the use of
(viii) Prior approval of stock exchanges for proceeds of issue of debt securities from
making material modifications to the th e o b j e c t s s t a t e d i n th e o ff e r
structure of debt securities (Regulation document.
59 of the LODR);

XII. Glossary
Term Meaning
Anchor Investor A QIB who makes an application for a value more than `100
million in a book built Issue during the Anchor Investor bid /
Issue period
ASBA Application Supported by Blocked Amount, an application

mechanism used by ASBA Bidders to make a Bid, whether
physical or electronic, by authorising an SCSB to block the Bid
Amount in the ASBA Account
Associate Associate of any person is as defined under the Companies Act,

2013 or under the applicable accounting standards and also
includes (i) any person controlled, directly or indirectly, by the
said person; (ii) any person who controls directly or indirectly
the said person; (iii) where the said person is a Body
Corporate, any person(s) who is designated as promoter(s) of
the company or Body Corporate and any other company or
Body Corporate with the same promoters; and (iv) where the
said person is an individual, any relative of the individual
Auditor e auditor of the REIT
Bid An indication to make an offer during the issue period by a

Bidder or during the Anchor Investor issue period by an
Anchor Investor, to subscribe to or purchase Units of the
REIT
Bidder Any prospective investor, other than an Anchor Investor or

Strategic Investor who makes a Bid in the Issue
Body Corporate Body corporate, as defined under Section 2(11) of the

Companies Act, 2013, as amended from time to time
Collecting Depository A depository participant as defined under the Depositories

Participant/CDP Act, 1996, registered with SEBI and who is eligible to procure
Bids at the designated CDP locations in terms of the circular
no. CIR/CFD/POLICYCELL/ 11/2015 dated November
10, 2015 issued by SEBI
Connected Analysts A research analyst or research entity that is an affiliate or

associate of any of the Merchant Bankers

Term Meaning
Continuous Circular on continuous disclosures and compliances by REITs

Disclosures Circular dated December 29, 2016 issued by SEBI
Designated Syndicate, Sub-Syndicate/Agents, SCSBs, Registered
Intermediaries brokers, Collections Depository Participants and Registrar
and Share Transfer Agents, who are authorized to collect
ASBA forms from the ASBA Bidders, in relation to the Issue
Dra Offer Document A dra offer document which does not include complete
particulars of the Issue including the Issue Price, issued in
accordance with the REIT Regulations and filed with SEBI
and the Stock Exchanges including any addenda or corrigenda
thereto filed with SEBI and the Stock Exchanges
Final Offer Document Final Offer Document including complete particulars of the
Issue size and Issue Price, filed with SEBI and the Stock
Exchanges aer the Pricing Date in accordance with the REIT
Regulations and the SEBI Guidelines and includes any
addenda or corrigenda thereto filed with SEBI and the Stock
Exchanges
FEMA Foreign Exchange Management, Act 1999, as amended and
the guidelines and regulations issued thereunder
FSI Floor Space Index
Holdco or Holding A company or an LLP: (i) in which the REIT Company hold
or proposes to hold not less than 50% of the equity share
capital or interest and which in turn has made investments in
other SPVs, which ultimately hold the properties;
(ii) which is not engaged in any other activity other than
holding of the underlying S P Vs, holding of rea l
estate/properties and any other activities pertaining to and
incidental to such holdings
ICAI Institute of Chartered Accountants of India
ILDS Regulations Securities and Exchange Board of India (Issue and Listing of
Debt Securities) Regulations, 2008, as amended
Ind AS Indian Accounting Standards
Indian GAAP Generally Accepted Accounting Principles in India

Term Meaning
Institutional Investors Institutional Investor means: (i) qualified institutional

buyers; or (ii) family trust or intermediaries registered with
SEBI, with net-worth of more than five hundred crore rupees,
as per the last audited financial statements
Investment Investment management agreement entered into between
Management the Trustee (on behalf of the REIT) and the Manager
Agreement Issue e public issue of the Units of a REIT
Issue Closing Date Except in relation to any Bids received from the Anchor
Investors and Strategic Investors, the date aer which the
Designated Intermediaries will not accept any Bids
Issue Opening Date Except in relation to any Bids received from the Anchor
Investors and Strategic Investors, the date on which the
Designated Intermediaries shall start accepting Bids
Issue Period Period between the Issue Opening Date and the Issue Closing
Date, inclusive of both days, during which Bidders, other than
Anchor Investors and Strategic Investors, can submit their
Bids, including any revisions thereof
LLP A limited liability partnership as defined under the Limited
Liability Partnership Act, 2008
LODR SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended
MCA Ministry of Corporate Affairs
Manager A company, a Body Corporate or an LLP which manages the
REIT Assets, manages the investments of the REIT and such
other activities as specified under the REIT Regulations
Members of the e Merchant Bankers and the Syndicate Members
Syndicate
Merchant Banker Merchant bankers, associated with the Issue and responsible
for due diligence and other Issue related activities
Merchant Banker e Securities and Exchange Board of India (Merchant
Regulations Bankers) Regulations, 1992

Term Meaning
Offer Document An offer document which does not have complete particulars
of the Issue issued in accordance with the provisions of the
REIT Regulations and the REIT Guidelines, including any
addenda or corrigenda thereto filed with SEBI and the Stock
Exchanges
Parties to the REIT e Sponsor, Sponsor Group, the Trustee and the Manager
QIBs or Qualified QIBs or qualified institutional buyers shall mean (i) a mutual
Institutional fund, venture capital fund, alternative investment fund and
Buyers foreign venture capital investor registered with SEBI,
(ii) a foreign portfolio investor, other than individuals,
corporate bodies and family offices, ( iii) a public
financial institution, (iv) a scheduled commercial bank,
(v) a multilateral and bilateral development financial
institution, (vi) a state industrial development corporation,
(vii) an insurance company registered with the IRDAI,
(viii) a provident fund with minimum corpus of `250 million,
(ix) a pension fund with minimum corpus of `250 million,
(x) National Investment Fund set up by GoI, (xi) insurance
funds set up and managed by army, navy or air force of the
Union of India, (xii) insurance funds set up and managed by
the Department of Posts, India, and (xiii) systematically
important non-banking financial companies
REIT(s) Real Estate Investment Trust(s)
REIT Assets Real estate assets and any other assets held by the REIT, on a
freehold or leasehold basis, whether directly or through a
holdco and/ or special purpose vehicle
REIT Guidelines e Guidelines for Public Issue of Units of REITs issued
by SEBI through a circular bearing number
CIR/IMD/DF/136/2016, dated December 19, 2016
REIT Regulations e Securities and Exchange Board of India (Real Estate
Investment Trusts) Regulations, 2014, including any
amendments guidelines and circulars issued by SEBI from
time to time

Term Meaning
Registered Brokers Stock Brokers registered with the Stock Exchanges having
nationwide terminals, other than the Members of the
Syndicate, eligible to procure Bids in terms of Circular No.
CIR/CFD/14/2012 dated October 4, 2012 issued by SEBI
Registrar A registrar to the issue registered under the Securities and
Exchange Board of India (Registrars to an Issue and Share
Transfer Agents) Regulations, 1993
Registrar and Transfer Registrar and transfer agents registered with SEBI and
Agents or RTAs eligible to pure Bids at the designated RTA locations in terms
of circular no. CIR/CFD/POLICYCELL/11/2015 dated
November 10, 2015 issued by SEBI
Registration Act e Registration Act, 1908
SEBI e Securities and Exchange Board of India
SEBI Debenture e Securities and Exchange Board of India (Debenture
Trustee Regulations Trustee) Regulations, 1993, as amended from time to time
SEBI Intermediaries e Securities and Exchange Board of India (Intermediaries)
SEBI Research e Securities and Exchange Board of India (Research
Analyst Regulations Analysts) Regulations, 2014, as amended from time to time
SPVs A company or an LLP (i) in which either the REIT or the
Holdco holds or proposes to hold not less than 50% of the
equity share capital or interest; (ii) which holds not less than
80% of its assets directly in properties and does not invest in
other SPVs; and (iii) which is not engaged in any other activity
other than holding and developing property and any other
activity incidental to such holding or development
Self Certified Banks registered with SEBI, offering services in relation to
Syndicate Bank/SCSB ASBA, a list of which is available on the website of SEBI at
https://www.sebi.gov.in/sebiweb/other/OtherAction.do?do
RecognisedFpi=yes&intmId=34 and updated from time to
time

Term Meaning
Sponsor Any person(s) who sets up the REIT and is designated as such
at the time of making an application for registration of the
REIT
Sponsor Group Sponsor group includes (i) the sponsor; (ii) in case the sponsor
is a body corporate: (a) entities or person(s) which are
controlled by such Body Corporate, (b) entities or person(s)
who control such Body Corporate, (c) entities or person(s)
which are controlled by person(s) as referred at clause b; (iii) in
case sponsor is an individual: (a) an immediate relative of such
individual; and (b) entities or person(s) which are controlled
by such individual
Stock Exchanges Any stock exchange where the Units of a REIT are proposed to
be listed
Strategic Investor An infrastructure finance company registered with the
Reserve Bank of India, a scheduled commercial bank, an
international multilateral financial institution, a systematically
important non-banking financial companies registered with
the Reserve Bank of India and foreign portfolio investors
Syndicate Members Intermediaries, registered with SEBI who are permitted to
carry out activities as an Underwriter
TDR Transferable Development Rights
Transaction Documents, including but not limited to agreements, entered
Documents into by or on behalf of the REIT in connection with the Issue
and the formation of the REIT
Trust Deed A trust deed entered into between the REIT, Sponsor and the
Trustee pursuant to which the trust (REIT) is settled
Trustee A trustee is a person who holds the REIT Assets for the benefit
of the Unitholders and is registered with SEBI under the
Securities and Exchange Board of India (Debenture Trustees)
Regulations, 1993
Trusts Act e Indian Trusts Act, 1882

Term Meaning
Unit A unit represents beneficial interest in the REIT, and such

Units together represent the entire beneficial interest in the
REIT
Unitholder(s) Any person who holds Units of the REIT
Valuer Any person who is a "registered valuer" under section 247 of
the companies Act, 2013 or as specified by SEBI from time to
time
Working Day Working Day, with reference to (a) announcement of Price
Band; and (b) Bid/Issue Period, shall mean all days, excluding
Saturdays, Sundays and public holidays, on which commercial
banks in Mumbai are open for business; and (c) the time period
between the Bid/ Issue Closing Date and the listing of the
Units on the Stock Exchanges, shall mean all trading days of
Stock Exchanges, excluding Sundays and bank holidays, as per
the SEBI Circular SEBI/HO/CFD/DIL/CIR/P/2016/26
dated January 21, 2016

NOTES

NOTES

NOTES

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De’constructing InvITs and REITs

A Foreword To e Second Edition

C Infrastructure Investment Trusts

D Real Estate Investment Trusts

De’constructing InvITs and REITs 001

002 De’constructing InvITs and REITs

While we expect legal and regulatory

De’constructing InvITs and REITs 003

De’constructing InvITs and REITs 005

006 De’constructing InvITs and REITs

De’constructing InvITs and REITs 007

02 What are the key laws applicable to InvITs?

03 Who are the parties involved in

010 De’constructing InvITs and REITs

05 Who are the various intermediaries involved in an InvIT?

De’constructing InvITs and REITs 011

Public Issue Banks would typically not

(v) Escrow Collection Banks

012 De’constructing InvITs and REITs

De’constructing InvITs and REITs 013

Investment Management Fees

Investment Management InvIT Trust Deed

Project Implementation and

07 What is the process for registration of an InvIT?

• Identiﬁcation and appointment of the • Submission of the application to SEBI

014 De’constructing InvITs and REITs

07 When is the Sponsor required to transfer infrastructure assets to the

De’constructing InvITs and REITs 015

03 What are the basic requirements for undertaking a public issue or a

An InvIT is eligible to undertake a public holding of InvIT in the underlying assets) is

018 De’constructing InvITs and REITs

05 What is the minimum subscription required in a public issue of the

A minimum subscription of 90% of the Issue

De’constructing InvITs and REITs 019

07 What are the borrowing limits applicable to an InvIT?

020 De’constructing InvITs and REITs

(c) If the post-Issue capital of the InvIT

10 What constitutes private placement? What are the eligibility requirements

A private placement is an oﬀer limited

In respect of a privately placed InvIT,

De’constructing InvITs and REITs 021

11 What is the minimum subscription required in a private placement?

 e r e i s n o m i n i m um s u b s c r i p t i o n have at least ﬁve investors (other than the

12 Are units required to be issued in dematerialised form?

13 Is an InvIT permitted to have multiple classes of Units?

022 De’constructing InvITs and REITs

De’constructing InvITs and REITs 023

02 What are the duties, roles and responsibilities of a Sponsor?

(c) e InvIT Regulations provide an

026 De’constructing InvITs and REITs

04 What are the duties, roles and responsibilities of a Trustee?

De’constructing InvITs and REITs 027

e Investment Manager may be a company, (d) e Investment Manager should have at

028 De’constructing InvITs and REITs

e duties, roles and responsibilities of the strategy of the InvIT;

De’constructing InvITs and REITs 029

10 Who is a Valuer? What are the eligibility requirements of a Valuer?

11 What are the duties, roles and responsibilities of a Valuer?

030 De’constructing InvITs and REITs