TaxTMI 
TaxTMI 
Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2024
X X X X Extracts X X X X
X X X X Extracts X X X X
....i. in clause (zg), the following explanation shall be inserted, namely - "Explanation. - For the purpose of calculating the number of outstanding units, any outstanding subordinate units shall not be included"; ii. after clause (zza), the following clause shall be inserted, namely - "(zzaa) "subordinate unit" means an instrument issued by an InvIT which can be reclassified as an ordinary unit"; iii. in clause (zzd), after the words and expression ""unit"" and before the word "means", the words and expression "or "ordinary unit"" shall be inserted; (2) in regulation 4, in sub-regulation (2), (a) clause (h) shall be substituted with the following, namely - "(h) subject to the provisions of Chapter IVA of these regulations, there shall be only one class of units and all units shall carry equal voting rights and distribution rights associated with such units."; (b) after clause (h), clause (i) shall be inserted, namely - "(i) the unitholder(s) holding not less than ten percent of the total outstanding units of the InvIT, either individually or collectively, shall - (i) be entitled to nominate one ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... units shall not carry any voting rights or distribution rights. (4) The subordinate units shall be issued in a dematerialized form with an International Securities Identification Number, distinct from that of the ordinary units. (5) The subordinate units shall be listed on a recognised stock exchange after their reclassification into ordinary units in accordance with the provisions contained in these regulations. (6) The subordinate units may be issued by way of an initial offer or any offer subsequent to the initial offer, either along with the issue of ordinary units or without the issue of ordinary units. (7) The issue of subordinate units made after the initial offer by the InvIT shall require the approval of the unitholders where votes cast in favour of the resolution shall not be less than one and a half times the votes cast against the resolution: Provided that any unitholder who is party to the acquisition of the infrastructure project including the sponsor, its associates and sponsor group, shall not be entitled to vote. (8) The price of subordinate units shall be determined according to the pricing guidelines applicab....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (2) The subordinate units shall not be transferable to any person except the sponsor, its associates and the sponsor group entities. (3) The subordinate units shall not be encumbered in favor of any person except the sponsor, its associates and the sponsor group entities. (4) The depository shall not register the transfer or encumbrance of a subordinate unit in favour of any person unless such a person is a sponsor of the InvIT, associate of such sponsor or belongs to the sponsor group of the InvIT. (5) The investment manager shall disclose any inter-se transfer or inter-se encumbrance of subordinate units to the recognised stock exchange within one working day of such transfer or encumbrance. (6) In case of a change in the sponsor, the outgoing sponsor shall transfer the subordinate units held by it, if any, to another sponsor, its associates or sponsor group. Entitlement date, entitlement event and performance benchmark. 17D. (1) The entitlement date, the entitlement event and the performance benchmark for reclassification of subordinate units to ordinary units shall be clearly defined and specified in the Term Sheet. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rdinate units are outstanding. Explanation. - For the purpose of this sub-regulation - (a) "diluted NAV" or "diluted net asset value" means the value of the InvIT assets reduced by the external debt divided by the total number of outstanding ordinary units and subordinate units; and (b) "diluted distribution per unit" means the value of total distribution, divided by the total number of outstanding ordinary units and subordinate units. Process for reclassification of subordinate unit. 17F. (1) The status of achievement of performance benchmark shall be certified by the statutory auditor of the InvIT for reclassification of subordinate units to ordinary units and shall be reviewed by the trustee and the audit committee of the investment manager. (2) If the performance benchmark is achieved at the end of the entitlement date, including extended period, if any; the subordinate units shall be reclassified into equal number of ordinary units on a pari passu basis in accordance with the terms and conditions of subordinate units mentioned in the Term Sheet. Explanation 1. - The reclassification can happen for all subordinate u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....subordinate units; and"; and (7) in regulation 23, after sub-regulation (9), the following sub-regulation shall be inserted, namely - "(10) The investment manager shall disclose the unitholding pattern for ordinary units and subordinate units separately in such manner as may be specified by the Board." BABITHA RAYUDU, Executive Director [ADVT.-III/4/Exty./140/2024-25] Footnotes: 1. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was published in the Gazette of India on September 26, 2014 vide No. LAD-NRO/GN/2014-15/10/1577. 2. The Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014 was subsequently amended by the - a. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2016, vide No. SEBI/LAD/NRO/GN/2016-17/021, with effect from November 30, 2016. b. Securities and Exchange Board of India (Infrastructure Investment Trusts) (Amendment) Regulations, 2017, vide No. SEBI/LAD-NRO/GN/2017-18/024, with effect from December 15, 2017. c. Securities and Exchange Board of India (Infrastructure Investm....