By Accommodation Times News Services
The Securities and Exchange Board of India (Sebi) is likely to approve the final norms for the listing of Real Estate Investment Trusts (REITS) and a new product Infrastructure Investment Trusts (InvITs) on the stock exchanges on August 10.
To make its proposed REIT norms more attractive, capital markets regulator Sebi has agreed to incorporate industry suggestions to reduce their minimum asset size to Rs 500 crore and to allow foreign investors at IPO and later stages.
The market regulator is likely to issue final regulations on Reits at its board meeting on Sunday in Delhi. It is said that the board is likely to approve key changes to the draft regulations, issued in October last year, to ensure attractiveness of the investment product, aimed at providing liquidity to the cash-short sector.
As per the new regulations along with foreign investors, domestic institutions like insurers, pension funds and provident funds would also be allowed to invest in these trusts. Through InvITs, the regulator is aiming to create a new avenue for raising funds to meet infrastructure investment requirements to the tune of Rs 65 lakh crore for the 12th Five Year Plan (2012-17). Alos, it would enable listing and trading of REITs and InvITs as any other security on the stock exchange platforms and also help create new platforms for raising of funds by real estate and infrastructure companies.
Despite significant tax benefits for the sponsors of these business trusts, these new regulations would also be “revenue accretive” for the government in form of taxes, sources said. As per the proposed regulations, they would help in channelising domestic investments into real estate and infrastructure sectors, and also help attract foreign capital for these fund-starved segments of the economy.