SEBI eases REITs rule
In order to facilitate growth of REITs, markets regulator Sebi today decided to allow such trusts to invest at least 50 per cent stake in holding companies.
Further, the capital market watchdog has proposed to provide additional avenues for listed entities to achieve minimum 25 per cent public shareholding (MPS) requirements, Sebi Chief Ajay Tyagi told reporters here after the board meeting.
These additional methods are — Qualified Institutions Placement (QIP) and sale of shares up to two per cent held by promoters or promoter group in open market.
Sebi had notified Real Estate Investment Trusts (REITs) Regulations in 2014, allowing setting up and listing of such trusts which are very popular in some advanced markets.
However, not a single REIT has been listed in the country.
Despite various earlier relaxations, listings have not taken place as they have failed to attract investors, Tyagi said.
Further, Sebi has decided to relax the norms for such trust and allowed REITs to “invest at least 50 per cent stake in Holdcos/SPVs and similarly allowing Holdco to invest at least 50 per cent stake in SPVs (special purpose vehicle)”.
However, this is subject to certain safeguards. This included the existing requirement of REITs to have ultimate holding interest of at least 26 per cent in the underlying SPV would remain unchanged.