• Strategic investor : An insurance company registered with the IRDAI and a mutual fund have been included in the definition of strategic investors.

• De-classification of the status of sponsor : De-classification of the status of sponsor whose units have been listed on the stock exchanges for a period of three years is permitted upon receipt of an application from the InvIT/REIT , provided: (a) The unit holding of such sponsor and its associates taken together does not exceed 10% of the outstanding units of the InvIT/REIT; (b) The investment manager of the InvIT/ manager of REIT is not an entity controlled by such sponsor or its associates; (c) Approval of unit holders has been obtained in accordance with sub-regulation 4 of Regulation 22 and (d) In case of a REIT, the sponsor or its associates should not be a fugitive economic offender;

• Maximum subscription : If the InvIT raises funds by way of private placement or by public issue, the maximum subscription from any investor other than sponsor(s), its related parties and its associates, in initial offer shall not be more than 25 percent of the total unit capital. In case of a REIT, an initial offer of units by the REIT shall be made if maximum subscription from any investor other than sponsor(s), its related parties and its associates is not more than 25 percent of the total unit capital.

• Rights of unit holder : No person, other than sponsor(s), its related parties and its associates, shall acquire units of an InvIT which taken together with units held by such person and by persons acting in concert with such person in such InvIT, exceeds twenty-five per cent of the value of outstanding InvIT units unless approval from seventy five per cent. of the unit holders by value excluding the value of units held by parties related to the transaction, is obtained: If the required approval is not received, the person acquiring the units shall provide an exit option to the dissenting unit holders in the manner as may be specified by the Board.”

• Omissions : The requirement that the minimum number of unit holders in an InvIT other than the sponsor(s) (its related parties and its associates), i.e. five in case of privately placed InvIT and twenty if forming part of the public, should each hold not more than twenty five per cent. of the units of the InvIT has been omitted; The requirement to provide an exit option to the unit holder if approval is not obtained on any issue not in the ordinary course of business, has also been omitted.

In the REIT regulations the requirement that the sponsor(s) and sponsor group(s) together hold not less than fifteen per cent. of the outstanding units of the listed REIT and that each of the sponsor individually shall hold not less than five per cent. of the outstanding units of the listed REIT at all times has been omitted. Further, the requirement of approval of unit holders in case the value of the units held by a person along with its associates, other than the sponsor(s) and its associates, exceeds fifty per cent. of the value of outstanding REIT units, prior to acquiring any further unit, has been omitted.

To refer to the notification of the SEBI (Infrastructure Investment Trusts) (Amendment) Regulations 2020 and the SEBI (Real Estate Investment Trusts) (Amendment) Regulations 2020, both dated 16 June 2020, click here and here.

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