Retail investors may use UPI, or the unified payments interface mechanism, to apply in the public offering of REITs and InvITs for application values up to Rs 5 lakh, according to capital markets regulator Sebi. The Securities and Exchange Board of India (Sebi) stated in two separate circulars that the new framework, which aims to further streamline the procedure, will be applicable to public issue of units of Infrastructure Investment Trust (InvIT) and real estate investment trust (REIT).
- The mechanism for paying for applications in the public offering of units of these new investment instruments under the facility of Applications Supported by Blocked Amount was established by the capital markets regulator in January 2019.
- Separately, the regulator has agreed to shorten the period of time needed for the allocation and listing of units of privately issued InvIT after the offering is closed from the current need of 30 working days to six working days.
- The action is a component of Sebi’s effort to simplify the allocation and listing of units.
- Although they are relatively new investment vehicles in the Indian context, REITs and InvITs are hugely popular on international stock markets.
- While an InvIT consists of a portfolio of infrastructure assets, such as highways and electricity transmission facilities, a REIT consists of a portfolio of commercial real estate, the majority of which is already leased out.
- The merchant banker must also make sure that all publications where the issue advertisement is published reveal the method of the additional payment mechanism using UPI.
- The investor’s PAN and client ID, which were entered on the stock exchange platform at the time of the bid, will be verified in real-time by the stock exchange(s) with the depositories.