Capital markets regulator SEBI on Friday provided an additional payment option of UPI or Unified Payments Interface mechanism for retail investors to apply in public issue of REITs and InvITs for application value of up to Rs 5 lakh.
The new framework, with an aim to further streamline the process, will be applicable to public issue of units of Infrastructure Investment Trust (InvIT) and Real Estate Investment Trust (REIT), which opens from August 1 with Securities and Exchange Board of India (SEBI) . ) said in two separate circulars.
In January 2019, the capital markets regulator laid down the payment procedure for applications in a public issue of units of these new investment instruments through the facility of application supported by Blocked Amount (ASBA).
Separately, the regulator has decided to reduce the time taken for allotment and listing of units of privately held InvITs after closing six working days as against the current requirement of 30 working days.
The move is part of SEBI’s effort to streamline the process of allotment and listing of units.
REITs and InvITs are relatively new investment instruments in the Indian context but are extremely popular in the global markets.
Whereas a REIT consists of a portfolio of commercial real properties, a large proportion of which is already leased, InvITs include a portfolio of infrastructure assets, such as highways and power transmission assets.
SEBI said that after consultation with stakeholders, it has been decided to provide an additional option to individual investors to apply in public issues of units of REITs and InvITs, with applications up to Rs 5 lakh through the UPI mechanism. There is a facility to block the money for the price.
The regulator has asked all the entities involved in the process to complete the listing of securities and coordinate with each other to commence trading by T+6 (trading plus six) working days.
Further, the merchant banker needs to ensure that the process of additional payment mechanism through UPI is disclosed in the offer document and in all the newspapers where the advertisement issued is disclosed.
The details of the investor – PAN and Client ID – entered on the stock exchange platform at the time of bidding, will be validated by the stock exchanges with the depositories on a real time basis.
The regulator asked the stock exchanges to update the demand data on their websites on working days, which would include all UPI (Approved/Pending) and ASBA bids.
The working day for this purpose shall be the working day of the Stock Exchange on which the units of REITs and InvITs are proposed to be listed. The details of the commission and processing fee payable to each intermediary and the time frame for payment should be disclosed in the offer document.