Summary on Master Circular for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs)

INTRODUCTION

The Securities and Exchange Board of India (“Board”) in the exercise of its powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 33 of the SEBI (Real Estate Investment Trusts) Regulations, 2014 (“REITs Regulations”) and Regulation 33 of the SEBI (Infrastructure Investment Trusts) Regulations (“InvITs Regulations”) has issued a Master Circular for REITs vide Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/116 dated July 06, 2023 (“REITs Circular”)ⁱ and InvITs vide Circular No. SEBI/HO/DDHS-PoD-2/P/CIR/2023/115 dated July 06, 2023 (“InvITs Circular”)ⁱⁱ respectively. This Circular comes up as a replacement for all circulars/ directions issued by SEBI under the relevant provisions of the REITs Regulations.
THE FOLLOWING ARE THE KEY HIGHLIGHTS OF THE MASTER CIRCULAR:

1. Appointment and obligations of merchant banker and others
   1. The manager and the investment manager as per the REITs Regulations and InvITs Regulations ( hereinafter referred to as “Manager”) must appoint one or more merchant bankers, including a lead merchant banker, and other intermediaries to handle various aspects of the REITs and the InvITs issue.
   2. If multiple merchant bankers are involved, their roles and responsibilities, including disclosure, allotment, refund, and underwriting obligations, must be pre-determined and disclosed in the offer document as per the regulations.


2. Filing of offer document::
   1. Draft Document

      Securities	Interest rate
      Submission to Board	The draft offer document shall be filed with the Board and the stock exchanges.
      Hosting on Websites	The draft offer document must be hosted on specified websites for comments for at least 21 days.
      Board Review and Comments	The Board may specify changes or issue observations within 30 (thirty) days from (later of the following): Receipt of the draft offer document by Board. The date of receipt of clarification or information from any regulator or agency, where the Board sought such information or clarification. The date of receipt of the copy of in-principle approval letter issued by the stock exchanges.
      Addressing Board Comments	The merchant bankers must address all comments received from the Board before filing the offer document.

   
   
   2. Offer Document A fresh offer document shall be filed with the board in case there were any changes along with the relevant fees so mentioned in the REITs and InvITs Regulations. Pursuant to the final offer document being filed with the Board, a pre-issue advertisement shall be made on the website of the sponsor, manager, and stock exchanges.


3. Security Deposit
   1. The manager on behalf of the InvITs or REITs must deposit an amount before the subscription opens.
   2. The deposited amount is calculated at a rate of 0.5% (point five percent) of the units' subscription amount or INR 5 crore (Rupees Five Crore Only) whichever is lower.
   3. The stock exchange(s) and the Board will specify the procedures for deposit, refund, release, or forfeiture of this deposit as needed.



4. Opening of an issue and subscription period
   1. Opening of Issue: The issue can be opened after at least 5 (five) working days from the date of filing the offer document with the Board.
   2. Due diligence certificate: The lead merchant banker must submit a due diligence certificate immediately before the opening of the issue.
   3. Duration of Public Issue: A public issue must be kept open for at least three working days but not more than 30 (thirty) days.
   4. Extension Due to Price Revision: If the price band in a public issue made through the book-building process is revised, the bidding (issue) period disclosed in the final offer document shall be extended for a minimum period of one working day. Price revision can be done a maximum of twice during the bidding period.
   5. Extension in Special Circumstances: In case of force majeure, banking strike, or similar circumstances, the REITs or InvITs, for reasons to be recorded in writing, may extend the bidding (issue) period disclosed in the offer document for a minimum period of three working days, subject to the total bidding period not exceeding thirty days.
   6. Issue Advertisements: The manager on behalf of the REITs or InvITs may issue advertisements for issue opening and issue closing.


5. Allocation in public issue:
   1. Allocation in a public issue shall be in the following manner:
      1. Up to 75% (seventy-five percent) allocated to Institutional Investors.
      2. At least 25% (twenty-five percent) allocated to other investors.
   2. The Manager in consultation with merchant bankers, can allocate up to 60% (sixty percent) of the Institutional Investor portion to anchor investors with specific conditions:
      1. Anchor investors must apply with a minimum of INR 10 crore (Rupees Ten Crore Only).
      2. Allocation is discretionary with a minimum of 2 (two) investors for up to INR 250 crore (Rupees Two Hundred and Fifty Crore Only) and 5 (five) investors for over INR 250 crore (Rupees Two Hundred and Fifty Crore Only).
      3. Bidding for anchor investors opens one day before the issue opening date.
      4. Price discrepancies require additional payment or no refund to anchor investors.
   3. Lock-in period of 30 (thirty) days for units allocated to anchor investors from the date of allotment.
   4. Certain entities are restricted from applying under the anchor investor category.
   5. Parameters for selecting anchor investors are defined by the merchant banker(s).


6. Allotment procedure and basis of allotment
   1. Upon receiving the payment for the units applied for, the manager on behalf of the REITs and InvITs will proceed to allot the units to the applicants..
   2. Allotment of units to applicants (excluding anchor investors) will be done proportionately within the specified investor categories. The number of units allotted will be rounded off to the nearest whole number, subject to the minimum allotment as per REITs and InvITs Regulations.
   3. In the case of under-subscription in any investor category, the unsubscribed portion may be allocated to applicants in the other investors category in the public issue.
   4. The designated stock exchange's authorized representatives, along with post-issue merchant bankers and registrars to the issue, will ensure that the basis of allotment is finalized in a fair and proper manner.


7. Bidding Process:
   1. ASBA facility for payment
      1. Bids are accepted using application supported by blocked amount (hereinafter referred to as “ASBA”) facility.
      2. Individual investors can use the Unified Payments Interface (UPI) mechanism to block funds for application values up to INR 5 lakh (Rupees Five Lakh Only)
   2. Electronic bidding platform
      Bidding takes place only through electronic bidding platforms provided by recognized stock exchanges.
   3. Modes of application
      1. Investors can apply through self-certified syndicate banks (hereinafter referred to as “SCSB”) or intermediaries, like syndicate members, registered stockbrokers, registrar, and transfer agents, or depository participants.
      2. Application methods include using ASBA as the sole payment mechanism, using intermediaries for blocking funds, or using a bank account-linked UPI ID for application values up to INR 5 lakh (Rupees Five Lakh Only).
   4. Roles of Entities Involved
      1. Issuer and stock exchange(s) have an arrangement specifying their responsibilities and dispute resolution.
      2. Issuer maintains a single escrow account for collecting application money through all methods.
      3. Registrars interact with the Stock Exchange platform for issue-related information.
      4. Stock exchanges provide a transparent electronic bidding facility and validate electronic bid details.
      5. Intermediaries are responsible for addressing investor grievances and data entry.
      6. Collecting banks handle investor grievances regarding fund confirmation and form submission.
   5. Display of Bidding Information Bidding terminals display an online graphical representation of demand and bid prices updated at intervals not exceeding thirty minutes.
   6. Closing bidding for institutional investors The manager may close bidding for institutional investors one day prior to the issue closure, provided it remains open for a minimum of three days for all applicants.
   7. Bid withdrawals Investors cannot withdraw or lower the size of bids at any stage.


8. Listing of units:
   The SCSBs, stock exchanges, depositories, intermediaries shall co-ordinate to ensure completion of listing (through public issue) and commencement of trading of units of the REITs/InvITs, within six working days from the date of closure of issue. The timeline for the same shall be as follows:
   

   Sl. No	Particulars	Timeline
   1.	Issue Closure	Tiii day
   2.	Bid Modification Receipt of electronic bids and applications by SCSB. SCSB to begin blocking of funds. Demat Account of REIT/InvIT credited with SPV shares	T + 1 day
   3.	The manager on behalf of InvITs or/and REITs, merchant banker and registrar and transfer agents (hereinafter referred to as “RTA”) to submit relevant documents to the stock exchange(s) except listing application, allotment details and demat credit and refund details for the purpose of listing permission. SCSBs to send confirmation of blocked funds. Reconciliation of data from stock exchange and SCSBs Transfer of shares from sponsor demat A/c to trust demat A/c.	T + 2 day
   4.	The allotment in the public issue to applicants other than anchor investors and strategic investors on proportionate basis. Stock Exchanges to approve the basis of allotment.	T + 3 day
   5.	SCSBs to credit funds in public issue account of the REITs and InvITs and confirm the same. Pursuant to successful transfer of assets to the REITs and InvITs, the allotment to the public shall be made. The manager shall initiate corporate action for credit units of REITs and InvITs to the allotees in the public issue.	T + 4 day
   6.	RTA to receive confirmation of demat credit from depositories. The merchant banker shall ensure that the allotment, credit of dematerialised units of REITs and InvITs and unblocking of application monies are done automatically. The Manager shall make listing application to stock exchanges to provide permission for trading.. Stock exchanges shall issue notice for listing and trading commencement.	T + 5 day
   7.	Trading commences	T + 6 day



9. Restrictions on Issue
   1. A REITs and InvITs cannot make a public issue of units if it, its parties, promoters, directors, or related entities are debarred from accessing the securities market by the Board.
   2. Additionally, if the REITs, InvITs or its related entities are in the list of wilful defaulters published by the Reserve Bank of India, they cannot issue units publicly.


10. Financial Disclosures
    1. Period of Financial Information to Be Disclosed
       The offer document must include financial information for the last three completed financial years immediately preceding the date of the offer document.
    2. Disclosure of Interim Financial Information
       If the last completed financial year ended more than six months before the date of the offer document, the REITs/InvITs must also provide interim financial information not more than six months old from the date of the offer document.
    3. Nature of Financial Information
       1. If it has been in existence for the last three completed financial years, provide historical financial statements for the last three years and interim period.
       2. If it hasn't been in existence for three years or lacks historical financial statements, combine financial statements for the available period.
    4. Content and Basis of Financial Information:
       1. Financial information must comply with Indian Accounting Standards (Ind AS).
       2. It may be in the form of condensed financial statements as per Ind AS 34.
       3. Required financial statements include Balance Sheet, Profit and Loss, Changes in Unit Holders' Equity, Cash Flow, Net Assets at Fair Value, and Total Returns at Fair Value.
       4. Specific adjustments must be made where applicable.
       5. Material items, those that can significantly impact decisions, should be disclosed.
       6. Items exceeding 1% of revenue from operations or INR 10 lakh (Rupees Ten Lakh) must be disclosed separately.
    5. Additional Financial Disclosures
       1. Project-wise operating cash flows.
       2. Earnings per unit.
       3. Contingent liabilities.
       4. Commitments.
       5. Related party transactions, including additional disclosures.
       6. Capitalization statement.
       7. Debt payment history.
    6. Audit of Financial Information:
       1. The financial information should be audited by an auditor subject to ICAI's peer review process.
       2. The auditor should follow the requirements of the Guidance note on Reports in Company Prospectuses.
       3. The audit report must confirm obtaining necessary information, agreement with books of account, and compliance with accounting standards.
       4. The auditor should give opinions on various financial statements' accuracy and fairness.
    7. Projections of REITs/InvITs Revenues and Operating Cash flows:
       1. The offer document must include income and operating cash flow projections for the REIT/InvIT project-wise, over the next three years, along with related assumptions.
       2. Projections should cover assets/projects owned by the REITs/InvITs or proposed for ownership before the public offer's unit allotment.
       3. Minimum disclosure items for the projections:
          1. Project-wise revenue (rental income and/or other operating income)
          2. Project-wise operating cash flows
          3. Assumptions for projections
          4. Any other relevant items for clarity and comprehension.
       4. The Manager should also certify these projections, including assumptions and calculations..


11. Management Discussion Analysis
    Management Discussion and Analysis ( hereinafter referred to as “MDA”) required to be disclosed in the offer document by the manager based on the financial documents. A comparison of recent financial information with the two previous years shall be provided.
    1. Contents of MDA
       1. Overview of the REITs/InvITs business.
       2. Summary of significant income and expenditure items.
       3. Factors affecting operations and key risk factors.
       4. Discussion on earnings quality and revenue streams.
       5. Following significant developments:
          
          1. Manager's statement on any material adverse circumstances arising since the last financial statements.
          2. Impact on business, profitability, asset value, and ability to meet liabilities.
       6. Procedures and approvals of related party transactions
       7. Analysis of changes in income and expenditure


12. Other Disclosures for REITs and InvITs
    1. Working Capital Disclosure
       
       1. Manager's statement on the sufficiency of working capital for at least 12 (twelve) months from the listing date.
       2. If insufficient, a description of how additional working capital will be provided.
    2. Past Market Performance
       In case of a capital offering subsequent to the initial offer, the market value of the units traded on all the designated stock exchanges where REITs/InvIT is listed shall be disclosed:
       1. On the last date of the reporting period.
       2. Highest value during the reporting period based on intra-day and closing prices with specified dates.
       3. Lowest value during the reporting period based on intra-day and closing prices with specified dates.


13. Framework for calculation of Net Distributable Cash Flows (NDCFs)
    1. Every manager shall define NDCFs for itself, and the definition as decided by REITs/InvITs Manager shall be:
       1. subject to compliance with Companies Act, 2013 or Limited Liability Partnership Act, 2008, or any Central Government Act, as applicable; and
       2. disclosed in offer document and shall be followed consistently pursuant to listing.


14. Other Disclosures for REITs and InvITs
    1. Disclosure of Financial Information to Stock Exchanges
       
    REITs/ InvITs to submit half yearly and annual financial information to the Stock Exchange:
    1. The financial information shall be submitted to the Stock Exchanges in standalone and consolidated basis within the following time period:
    
    

    TIME PERIOD OF FINANCIAL YEAR	CONDITION WHILE SUBMITTING	TIMELINE	TO BE CALCULATED
    First half year period		Within 45 (forty- five) days	From the end of the half year.
    Annual financial information		Within 60 (sixty) days	From the end of the financial year.
    Second half year period	To be submitted along with the annual financial information To be submitted with a note stating that the figures of the second half year period figures of annual-figures of first half period.

    
    
    2. Comparative Information
       1. Annual financial information shall contain comparative information for the immediately preceding financial year.
       2. The half yearly financial information comparative information for the immediately preceding half year as well as for the corresponding half year in the immediately preceding financial year.
       3. In case of REITs/InvITs was not in existence during the immediately preceding financial year then there can be no comparative information thus the fact can be clearly disclosed.
    3. Key Financial Statements:
       1. The REITs/ InvITs financial information, presented as condensed financial statements, must adhere to minimum requirements outlined in Ind AS 34 on 'Interim Financial Reporting'.
       2. The annual financial information shall include the following financial statements:
          
          1. Balance Sheet.
          2. Statement of Profit and Loss/Income and Expenditure.
          3. Statement of Changes in Unit holders’ Equity
          4. Statement of Cash Flows/ Receipts and Payments.
          5. Statement of Net Assets at Fair Value.
          6. Statement of Total Returns at Fair Value; and
          7. Explanatory notes annexed to, or forming part of, any statements referred above.
       3. The half-yearly financial information includes:
          
          1. Profit and Loss/Income and Expenditure statements and
          2. Explanation notes.
       4. Key statements must disclose minimum information as specified in chapter 3 of this master circular.
       5. Proffit or loss should be shown on gross basis in sale/divestment of any holding or sale of any real estate asset by the REITs/InvITs.
    4. Additional Disclosures
       The financial information, including key statements and disclosures, must be included in both half-yearly and annual reports, and may be audited or limited reviewed if applicable.
       1. A REIT/InvIT must disclose NDCF statements for REITs/ InvITs, HoldCos, and SPVs, in accordance with the Manager's definition and the offer document's calculation framework.
       2. Disclosures related to Modified Opinion(s)
          1. The disclosures mentioned are only required for the annual financial information of the REITs/ InvITs.
          2. The REITs/InvITs must file a "Statement on the Impact of Audit Qualifications" when submitting audited annual financial information to the Stock Exchanges, detailing any modified opinions and their cumulative impact, following the format specified in SEBI Circular No. CIR/CFD/CMD/56/2016 dated May 27,2016.
       3. Other Statements:
          
          1. The REITs/InvIT must disclose its earnings per unit, contingent liabilities, commitments, and related party transactions.
          2. The disclosures for the aforementioned statements will adhere to the details and basis outlined in Paragraph 3.4 of Chapter 3 of this master circular.
    5. Approval and Authentication of Financial Information
       
       1. The financial information submitted to Stock Exchanges must be approved by the Board of Directors/Governing Body, authenticated, and signed in a specific manner.
       2. Two designated Manager personnel must sign financial information, certifying it's free from false or misleading statements or figures, and omitting any material fact that makes them misleading.
       3. The financial information must be signed by the Chairperson, Managing Director, or Whole-Time Director on the Manager's Board of Directors/Governing Body, or authorized by the Board in their absence.
    6. Audit of Financial Information
       
       1. The REITs/InvITs must audit its annual financial information, while half-yearly financial information can be audited or unaudited, with limited review by the auditor if submitted unaudited.
       2. The audit/limited review shall be carried out by the auditor appointed for the REITs/InvITs as per the REITs/InvITs Regulations. The auditor so appointed must have undergone the ICAI peer review process and hold a valid certificate from the peer review board.


15. Other Continuous Disclosures to Stock Exchanges and Other Compliance
    1. Listing agreement
       
       1. REITs/InvITs is to enter into a simplified listing agreement with all Stock Exchanges where it proposes to list its units, following the SEBI Circular No. CIR/CFD/CMD/6/2015, while adhering to the uniform listing agreement.
       2. REITs and InvITs regulations and circulars should be followed in the case of compliance with the listing condition.
    
    
    2. Disclosure of unit holding pattern
       A REITs/InvITs must disclose its unit holding pattern to each class of unit holders within three time periods:
       
       1. one day before stock exchange listing,
       2. 21 days after each quarter
       3. and 10 days of capital restructuring of REITs/InvITs
    
    
    3. Review of credit rating
       
       1. Every Credit rating to be reviewed once in a year by the registered credit rating company and to be obtained as per 20(2) of the REITs/InvITs Regulations.
       2. Credit ratings must be reviewed annually by the registered credit rating agency, completed within 30(thirty) days of the end of the financial year, and promptly sent to the Stock Exchanges upon completion and upon receipt of the credit rating report.
    
    
    4. Website of REITs/InvITs
       
       1. REITs/InvITs are required to maintain a functional website with updated content for the last two days, containing all relevant information about REITs/InvITs.
       2. The document provides detailed business information, financial reports, contact details for grievance handling officials, email addresses, unit reports, all information and reports including compliance reports, all announcements made by REITs/InvITs to stock exchanges, as well as other relevant information for investors.
       3. The website's contents should be updated within two days of any modifications or developments that necessitate updating the website.
    
    
    5. Statement of deviation(s) or variation(s)
       
       1. The REITs/InvITs must submit quarterly statements to recognized stock exchanges for public, rights, and preferential issues, indicating deviations in proceeds usage and category-wise variations between projected and actual fund utilization, as per the notice for general meetings.
       2. The statement(s) specified above will be provided until issue proceeds are fully utilized or purposeful, and reviewed by the Trustee and Manager's Board, and submitted to the stock exchange(s) within 21 days of each quarter end.
       3. REITs/InvITs must explain variations in its annual report and prepare an annual statement of funds used for other purposes not stated in offer document, certified by statutory auditors of the REITs/InvITs, for the general meeting and trustees until funds are fully utilized.
    
    
    6. Additional Disclosures for the issuance of Debt Securities by REITs/InvITs
       REITs/InvITs have to comply to these regulations for issuance of debt securities,
       
       1. Additional line items that shall be disclosed by REITs/InvITs which have issued/listed their debt securities are as follows:
          1. Asset cover available.
          2. debt-equity ratio.
          3. debt service coverage ratio.
          4. interest service coverage ratio.
          5. net worth.
       2. The board of the manager must appropriately and promptly address any modified opinions in audit reports that have an impact on the REITs/InvITs ability to pay interest, redeem shares, or repay principal. This must happen before the accounts for the relevant period are published.
       3. Every six months, REITs/InvITs are required to publish to the stock exchange, together with their half-yearly financial results, a statement outlining any major departures from the offer document's stated objectives in the use of the proceeds from the issuance of debt instruments.


16. Participation by Strategic Investors(s) in REITs/InvITs
    1. In case an REITs/InvITs chooses to invite subscriptions from strategic investors, it shall undertake and ensure the following:
       1. The investment of the strategic investors jointly or severally invests not less than 5% (five percent) and not more than 25% (twenty-five percent) of the total offer size.
       2. The Manager shall carry out a binding unit subscription agreement with the strategic investor (s) proposing to invest in the public issue of REITs/ InvITs. This agreement shall also set out the subscription price per unit payable by the strategic investor and the entire subscription price shall be deposited in a special escrow account prior to opening of the public issue.
       3. The price at which the strategic investor has agreed to buy the units of REITs/InvITs shall not be less than the issue price so determined in the public issue. In case the issue price is higher than the price agreed by the strategic investor, the additional amount shall be brought in within two working days of the price determination of the public issue. However, if the price determined in the public issue is lower than the price at which the allocation is to be made to strategic investor, the excess amount shall not be refunded to the strategic investor and the strategic investor shall take allotment at the price at which allocation was agreed to be made to it in unit subscription agreement.
       4. The draft offer document shall disclose the details of the unit subscription agreement.
       5. The unit subscription agreement shall not be terminated except in the event the issue fails to collect the minimum subscription.


17. Guidelines for Issuance for Debt Securities by REITs/InvITs
    
    1. REITs/InvITs shall follow the provisions of Security Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021 (“NCS Regulations”) for the issuance of debt securities in the following manner:
       1. Regulations 16 and 25(4) of the NCS Regulations shall not be applicable for issuance of debt securities by REITs/InvITs.
       2. The compliances with respect to Companies Act, 2013 or filing compliances with the Registrar of Companies (“RoC”) under the NCS Regulations shall not be applicable to the issuance of debt securities by REITs/InvITs.
       3. In case of conflict of the NCS Regulations with the REITs/InvITs Regulations, the REITs/InvITs Regulations (as the case maybe) and the circulars relating to the same shall prevail over the NCS Regulations.
       4. For the issuance of debt securities, a debenture trustee registered with SEBI shall be appointed.
       5. Any secured debt securities issued by the REITs/InvITs shall be secured by the creation of a charge on the assets of the REITs/InvITs or the holding company, the value of which shall be equivalent for the repayment of the amount of the debt securities and interest therein.


18. Guidelines for issuance of commercial paper by REITs and InvITs
    
    1. In accordance with the Reserve Bank Commercial Paper Directions, 2017, REITs/InvITs having net worth of INR 100 crore (Rupees Hundred Crore) or higher are eligible to issue commercial paper. REITs may issue listed commercial papers subject to the following:
       1. REITs/InvITs shall abide by the guidelines prescribed by Reserve Bank of India for issuances of commercial papers.
       2. REITs/InvITs shall abide by the conditions of listing norms prescribed under NCS Regulations and circulars issued by the Board thereunder.
       3. The issuance of listed commercial papers shall be within the overall debt limit permitted under the REITs/InvITs Regulations.


19. Guidelines for Preferential issue and institutional placement of units by listed REITs and InvITs
    
    1. Conditions for preferential issuance and institutional placement
       A listed REITs or InvIT may make a preferential issuance or institutional placement subject to the following conditions:
       1. Resolution of the existing shareholders approving the issue of units in accordance with Regulation 22(5) of the REITs Regulations or the InvITs Regulations as the case may be.
       2. The REITs/ InvITs has obtained in principle approval of the stock exchange for the listing of the units proposed to be issued.
       3. The REITs / InvITs is in compliance with all the conditions for continuous listing and disclosure obligations under the REITs Regulations or InvITs Regulations (as the case may be) and circulars issued thereunder.
       4. None of the promoters or partners or directors of the sponsor(s) or manager or trustee of the REITs or InvITs is a fugitive economic offender declared under section 12 of the Fugitive Economic Offenders Act, 2018.
       5. There shall be no subsequent institutional placement for 2 (two) weeks from the date of the prior institutional placement so made.
    
    
    2. Manner of Issuance of Units
       The units shall be issued in the following manner:
       1. The units shall be allotted only in the dematerialized form and listed on the stock exchanges where the units of the REITs or InvITs are listed.
       2. Any allotment via private placement shall not be made to more than 200 investors in a financial year.
       3. Post allotment, the REITs/InvITs shall make an application for listing of units to the stock exchanges and the units shall be listed within 2 (two) working days from the date of allotment. In case the REITs/InvITs fails to list the units within the specific time, the monies received shall be refunded within 4 (four) working days of allotment, in case the REITs/InvITs fail to refund the amount within the stipulated time then the manager and the director shall be jointly liable to repay that money with interest at the rate of 15%(fifteen percent)
       4. An allotment report shall be filed with SEBI within 7 (seven) working days of allotment of units specifying the details of the allottees and the allotment made.
    
    
    3. Lock-in
       
       1. The units allotted to the sponsors and its associates shall be locked in for a period of three years from the date of trading approval granted for the units. Units not more than 25% (twenty-five percent) of the total unit capital of the REITs /InvIT shall be locked in for 3 (three) years from the date of approval of trading.
       2. The units allotted to persons other than sponsors shall be locked in for a period of 1(one) year from the date of approval of trading.
       3. The entire pre-preferential issue unitholding of the allottees, if any, shall be locked in from the relevant date up to a period of six months from the date of approval of trading.
    
    
    4. Allotment in case of preferential issue
       
       1. Preferential issue of units shall not be made to any person who has sold or transferred any units of the issuer during the 90 trading days preceding the relevant date. Further, where any person belonging to the sponsor(s) has sold/transferred their units of the issuer during the 90 days preceding the relevant date, all sponsors shall be ineligible for allotment of units on a preferential basis.
       2. The allotment pursuant to the unit holder’s resolution shall be completed within a period of 15 (fifteen) days from the date of passing of such resolution. It has to be noted that where the REITs/InvITs fails to allot the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the resolution, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REITs/InvIT and the Manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of fifteen percent per annum.
    
    
    5. Transferability
       The units allotted through the institutional placement shall not be sold by the allottee for a period of one year from the date of allotment, except on a recognised stock exchange.
    
    
    6. Allotment in case of institutional placement
       Allotment pursuant to the unit holders’ resolution shall be completed within a period of 365 days from the date of passing of such resolution. In case where the REITs/InvITs fails to allot the units within the specified time, the monies received shall be refunded through verifiable means within twenty days from the date of the closure of the issue, and if any such money is not repaid within such time after the issuer becomes liable to repay it, the REIT/InvIT. the Manager and its director or partner who is an officer in default shall, on and from the expiry of the twentieth day, be jointly and severally liable to repay that money with interest at the rate of 15% (fifteen percent) per annum.


20. Guidelines for Rights Issue of Units by a listed REIT/InvIT
    
    1. Conditions for issuance
       No REITs/InvIT shall make a rights issue of units unless the following conditions are satisfied:
       1. A resolution of the board of directors of the manager approving the rights issue of units and determining the record date has been passed.
       2. The REITs/InvIT has obtained in-principle approval of the stock exchange(s) for listing of units proposed to be issued under these guidelines.
       3. The REITs/InvIT is in compliance with the continuous listing and disclosure obligations under the REITs/InvIT Regulations and circulars issued thereunder. It has to be noted that imposition of only monetary fines by stock exchanges on the REITs/InvIT shall not be a ground for ineligibility for undertaking issuances under these guidelines.
       4. None of the respective promoters or partners or directors of the sponsor(s) or Manager or trustee of the REITs/InvITs is a fugitive economic offender declared under section 12 of the Fugitive Economic Offenders Act, 2018.
    2. Subscription, Allotment and Listing of Units
       
       1. The minimum subscription received in the rights issue shall be 90% (ninety percent) of the issue size through the letter of offer. If the above-mentioned subscription is not met then the application monies so received shall be refunded to the applicants in not later than 15 (fifteen) days from the issue closing date.
       2. Allotment shall be made in accordance with the following:
          1. Full allotment to those eligible unitholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s), who has/have applied for the units renounced in their favour, in full or in part, as adjusted for fractional entitlement.
          2. If there is an unsubscribed portion pursuant to making the above allotment then the allotment shall be made to eligible unitholders who have applied for the units in full to the extent of their rights entitlement and have also applied for additional units shall be made as far as possible on an equitable basis, having due regard to the number of units held by them on the record date.
          3. Allotment to the renouncee and the additional units so applied by them if there is an unsubscribed portion after the allotment to the above.
          4. Allotment to the sponsors and their associates if there is an unsubscribed portion after the allotment to the above.
          5. Allotment to the underwriter appointed for the issue at the discretion of the board of directors of the manager.
    3. Restriction on further capital issues
       The REITs/InvITs shall not make any further issue of units in any manner whether by way of public issue, rights issue, preferential issue, qualified institutions placement, institutional placement, issue of bonus shares or otherwise during the period between the date of filing the draft letter of offer with the Board and the listing of the units offered through the letter of offer or refund of application monies.
    4. Conditions for Fast Track Rights Issue
       An REITs/InvITs satisfying the following conditions shall be eligible for fast-track rights issue:
       
       1. The units of the REITs/InvITs have been listed on any stock exchange for a period of at least three years immediately preceding the record date.
       2. All the units of the REITs/InvITs have been held in demat form on the record date.
       3. The average market capitalization of public unitholding of the REITs/InvITs is at least INR. 250 crore (Rupees Two Hundred and Fifty Crore).
       4. The REITs/InvITs is in compliance with the listing and disclosure requirements of the REITs/InvITs Regulations.
       5. The REITs/InvITs has redressed at least ninety-five per cent. of the complaints received from the investors till the end of the quarter immediately preceding the month of the record date.
       6. There have been no show cause notices or prosecution proceedings initiated by the Board pending against the REITs/InvITs or their respective promoters or directors or partners.
       7. The REITs/InvITs, parties to the REITs or InvITs or their respective promoters or partners or directors have not settled any alleged violation of securities laws through the consent or settlement mechanism with the Board during the immediate 3 (three) preceding years.
       8. The units of the REITs/InvITs have not been suspended from trading as a disciplinary measure and there has been imposed no regulatory action during the last three preceding years.
       9. The sponsor(s) shall mandatorily subscribe to their rights entitlement and shall not renounce their rights, except for the purpose of complying with minimum public shareholding norms prescribed under the REITs/InvITs Regulations.


21. Framework for conversion of private listed InvIT into public listed InvIT
    A Private Listed InvIT may be converted into a Public Listed InvIT through a fresh issue and/or offer for sale. This chapter provides for the various terms and conditions for the conversion of Private Listed InvIT to Public Listed InvIT. A Private Listed InvIT shall stand converted once the public issuance has been complete.
    1. Conditions for Issuance
       In addition to the conditions and provisions applicable for initial offer through public issue of units, the following conditions need to be fulfilled for the issuance:
       1. The assets so held by the InvIT satisfy the conditions under Regulation 18(5) of the InvIT Regulations.
       2. The Private Listed InvIT is in compliance with the applicable listing obligations and disclosure requirements specified for Private Listed InvIT since the date of its listing or the preceding three years whichever is less. It has to be noted that mere imposition of fines by stock exchanges shall not be a valid ground for ineligibility for issuance. Furthermore, the Private Listed InvIT should not be in default in making any distribution since listing under the InvIT Regulations and its distribution policy.
       3. The Private Lusted InvIT has to be in compliance with Regulations 16(6)(7) of the InvIT Regulations as applicable.
       4. It has to obtain an approval from at least 75% (seventy five percent) of the unit holders by value for such public issue.
       5. The draft offer shall disclose the following in addition to the disclosures under the InvIT Regulations:
          
          1. Details of distributions made by the InvIT
          2. Comparison of actual performance vis-à-vis the projections made in the placement memorandum at the time of initial offer
    2. Conditions for offer for sale of units
       
       1. An existing unitholder may offer for sale the unit held in the public issue in accordance with Regulation 14(4)(v) of the InvIT Regulations.
       2. Provided that such units shall be free from any encumbrance or lock-in on the date of filing of draft offer document.
       3. Provided further those unitholders, other than the sponsor(s), its related parties and its associates, who offer units towards the offer for sale shall not be eligible to participate in the public issue.
    3. Procedure for public issue of units
       
       1. An existing unitholder may offer for sale the unit held in the public issue in accordance with Regulation 14(4)(v) of the InvIT Regulations.
       2. Provided that such units shall be free from any encumbrance or lock-in on the date of filing of draft offer document.
       3. Provided further that unitholder, other than the sponsor(s), its related parties and its associates, who offer units towards the offer for sale shall not be eligible to participate in the public issue.


22. Reduction of timeline for listing of units of privately placed InvITs
    
    a) In accordance with InvIT Regulations, the listing of privately placed InvIT units shall be completed within 30 (thirty) working days from the date of allotment. But this timeline is indicative. In order to streamline the process of allotment and listing of units the time taken for allotment and listing of units of privately placed InvIT, after the closure of issue shall be 6 (six) working days. The timeline prescribed is as follows:

    Sl. No	Particulars	Due Date
    1.	Debt securities issued on private placement or public issue	T dayiv
    2.	shall transfer the entire shareholding in the Holding Company as disclosed in the placement memorandum. Final list of allottees with the number of units to be allotted to the applicants. Finalization of Final Placement Memorandum and dispatch of confirmation of allocation notes. The Manager to initiate corporate action for credit of units of InvIT to the demat account of the sponsors, shareholders and investors.	Within T+3 working days
    3.	Receipt of confirmation by the Manager from the depositories about the credit of units in demat accounts of the sponsors, shareholders and investors.	Within T+4 working days
    4.	Pursuant to the allotment, the Manager shall make a listing application to the stock exchanges for listing and trading permission. Stock exchanges to issue notice for listing and commencement of trading Stock exchanges to send notice to depositories in order to change the status of ISIN to active	Within T+5 working days
    5.	Trading Commences	Within T+6 working days


CONCLUSION
The above circulars issued by SEBI aims to streamline the regulatory framework and ensure compliance to the regulations in the real estate and infrastructure investment sector. The circulars are comprehensive master circulars bringing together all the circulars emphasising the need for compliance reporting.