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Guidelines for public issue of units of REITs
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.... www.sebi.gov.in under the categories "Legal Framework" and under the drop down "Circulars". Yours faithfully, Richa G. Agarwal Deputy General Manager Investment Management Department Tel No.022-2644 9596 Email id - [email protected] Schedule-A Guidelines for public issue of units of REITs 1. Appointment and obligations of merchant banker and others: (1) The Manager on behalf of the REIT, in line with Regulation 10 (5) of REIT Regulations, shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the merchant banker(s), to carry out the obligations relating to the issue. (2) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document. 2. Filing of offer document (1) Draft offer document, offer document and final offer document shall mean as under: a. Draft offer document refers to the draft of the offer document filed with the Board and t....
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.... Board along with the offer document: (a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document; (b) a due diligence certificate as per Form B of Annexure I (8) If changes are made in the draft offer document or offer document with respect to any of the following, the lead merchant banker shall file fresh draft offer document with the Board highlighting all changes made in the draft offer document or offer document, as applicable, along with the fees as specified in REIT Regulations: (a) Change in sponsor(s), sponsor group, Manager or persons in control of the sponsor(s)/ Manager. Provided that, in case of change in sponsor group, fresh filing shall be applicable only if the involved sponsor group entity(ies) hold/propose to hold more than 5% of the total units of the REIT after initial offer on a post-issue basis. (b) Change in more than half of the board of directors of the Manager. (c) Change in any object(s) of the issue contributing/amounting to more than 20% of the issue size. (d) Any increase or decrease in estimated issue size by more than twenty five per cent. (9) All other changes/ up....
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....days on the units allotted to the Anchor Investor from the date of allotment in the public issue. (g) Neither the merchant banker(s) nor any person related to the merchant banker(s) in the concerned public issue can apply under Anchor Investor category except Mutual Funds, Insurance Companies and Pension Funds. (h) The parameters for selection of Anchor Investor shall be clearly identified by the merchant banker(s). 4. Application and Abridged version of the offer document. (1) The application form and the abridged version of the offer document as stated in Regulation 14(13) of the REIT Regulations for the issue shall be prepared by the merchant banker(s). (2) The merchant banker(s) shall make arrangements for distribution of the application form along with a copy of the abridged version of the offer document. (3) The abridged version of the offer document shall contain the disclosures as specified in Annexure III and shall not contain any matter extraneous to the contents of the offer document. (4) No person shall make an application in the public issue for that number of units which exceeds the number of units offered to public. 5. Security Deposit (1) The Manager on b....
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....leased and website of REIT, if applicable. (4) The announcement referred to in clause 8(3) above shall contain relevant financial ratios computed for both upper and lower end of the price band and also a statement drawing attention of the investors to the section titled "basis of issue price" in the offer document. (5) The floor price or price band and the relevant financial ratios referred to in clause 8(4) shall be disclosed on the websites of those stock exchanges where the units are proposed to be listed. (6) The floor price or price band shall be pre-filled in the application forms available on the websites of the stock exchanges. (7) The Manager on behalf of the REIT shall, in consultation with merchant banker(s), determine the issue price based on the bids received. (8) Once the final price (cut-off price) is determined, all those bidders whose bids have been found to be successful (i.e. at and above the final price or cut-off price) shall be entitled for allotment of units. (9) The merchant banker(s) may reject a bid placed by a qualified institutional buyer for reasons to be recorded in writing provided that such rejection shall be made at the time of acceptance of t....
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....stor categories and the number of units allotted shall be rounded off to the nearest integer, subject to minimum allotment as per REIT Regulations. (3) In case of under-subscription in any investor category, the unsubscribed portion in either of the category specified in clause 3(1) may be allotted to applicants in the other category. (4) The authorized representatives of the designated stock exchange along with the post issue merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalized in a fair and proper manner. 11. Maintenance of books and records (1) A final book of demand showing the result of the allocation process shall be maintained by the merchant banker(s). (2) The merchant banker(s) and other intermediaries associated in the book building process shall maintain records of the book building prices. (3) The Board shall have the right to inspect the records, books and documents relating to the book building process and such person shall extend full co-operation. 12. Post- issue reports. (1) The lead merchant banker shall submit the following post-issue reports to the Board: (a) initial post issue report as specified in Part ....
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....al commercial name of the sponsor/manager. (f) it shall not use extensive technical, legal terminology or complex language and excessive details which may distract the investor. (g) it shall not contain statements which promise or guarantee rapid increase in profits /yield/returns (h) it shall not display models, celebrities, fictional characters, landmarks or caricatures or the likes. (i) no issue advertisement shall appear in the form of crawlers (the advertisements which run simultaneously with the programme in a narrow strip at the bottom of the television screen) on television. (j) in any issue advertisement on television screen, the risk factors shall not be scrolled on the television screen and the advertisement shall advise the viewers to refer to the red herring prospectus or other offer document for details. (k) It shall not contain slogans, expletives or non-factual and unsubstantiated titles. (l) if it contains highlights, it shall also contain risk factors with equal importance in all respects including print size of not less than point seven size. (5) No such public communication shall be issued giving any impression that the issue has been fully subsc....
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....ts, if the REIT or parties to the REIT or the promoter(s) or director(s) of parties to the REIT: (a) is debarred from accessing the securities market by the Board; (b) is a promoter, director or person in control of any other company or a sponsor, manager or trustee of any other REIT or REIT which is debarred from accessing the capital market under any order or directions made by the Board; (c) is in the list of the willful defaulters published by the Reserve Bank of India. (2) Alteration of rights of holders of units. No REIT shall alter the terms (including the terms of issue) of units which may adversely affect the interests of the holders of that units unless a resolution to that effect is passed at a meeting of the unitholders in accordance with Regulation 22(5) of REIT Regulations. (3) Prohibition on payment of incentives. No person connected with the issue, including a person connected with the distribution of the issue, shall offer any incentive, whether direct or indirect, in any manner, whether in cash or kind or services or otherwise to any person for making an application for allotment of units: Provided that nothing contained in this regulation shall apply to ....
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....onfirm as follows: (1) We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators, etc. and other material in connection with the finalization of the offer document pertaining to the said issue; (2) On the basis of such examination and the discussions with the REIT, its Sponsor(s) and/or sponsor group and Manager, directors and other officers, other agencies, and independent verification of the statements concerning the terms of the issue, price justification and the contents of the documents and other papers furnished by the Manager, we confirm that: (a) the draft offer document filed with the Board is in conformity with the documents, materials and papers relevant to the issue; (b) all the legal requirements relating to the issue as also the regulations, guidelines, instructions, etc. framed/issued by the Board, the Central Government and any other competent authority in this behalf have been duly complied with; and (c) the disclosures made in the draft offer document are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed is....
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....elines for public offer issued under the REIT Regulations. (12) We certify that profits from related party transactions have arisen from legitimate business transactions. Place: Merchant Banker(s) to the Issue Date: with Official Seal(s) FORM B FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT BANKER AT THE TIME OF FILING OFFER DOCUMENT WITH THE BOARD AND THE DESIGNATED STOCK EXCHANGE To, Securities and Exchange Board of India Dear Sirs, Sub.: Public Issue of ……………….. by ……………………… (Name of the REIT) (1) This is to certify that the offer document filed with the Board and Stock Exchanges has been suitably updated and that the said offer document contains all the material disclosures in respect of the REIT as on the said date. (2) We confirm that the registrations of all the intermediaries named in the offer document are valid as on date and that none of these intermediaries have been debarred from functioning by any regulatory authority. (3) We confirm that agreements have been entered into with both the depositories for dematerialisation of the uni....
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.... the Issue Date: with Official Seal(s) 17 ANNEXURE II FORMATS OF POST ISSUE REPORTS PART A FORMAT OF INITIAL POST ISSUE REPORT FOR PUBLIC ISSUE Subscription Status: (Subscribed/ Undersubscribed) Note: It is the responsibility of merchant banker(s) to give correct information after verifying it from the Manager and the registrar to the issue. (1) Name of the REIT : (2) Issue opening date : (3) Earliest closing date : (4) Actual closing date : (5) Date of filing offer document with Board : (6) Issue Details (as per the offer document) (a) Offer price per unit : (b) Issue size: (Rs lakhs) i. Sponsors and/or sponsor group contribution : ii. Amount through offer document: (c) Provisional subscription details of public offer i. Total amount to be collected on application: Rs lakhs ii. Amount collected on application: Rs lakhs iii. % subscribed i.e. % of (ii) to (i): (%) (7) Please tick mark whether 90% minimum subscription is collected. (i) YES (ii) NO Signed by Signed by Signed by Registrars to the Issue Manager on behalf of the REIT Merchant Banker(s) Date: Place: PART B FORMAT OF FINAL POST ISSUE REPORT FOR PUBLIC ISSUE Subscription Statu....