The Securities and Exchange Board of India (“SEBI”) by a circular issued on November 17, 2020, has introduced amendments to the guidelines for preferential issue and institutional placement of units by a listed infrastructure investment trust (“InvIT”) contained in SEBI circular SEBI/HO/DDHS/DDHS/CIR/P/2019/143, dated November 27, 2019 (“Circular”).
Pursuant to the amendment, clause 4.1 of annexure I of the Circular has been modified to state as follows:
“Preferential issue of units shall not be made to any person who has sold or transferred any units of the issuer during the six months preceding the relevant date.
Explanation: Where any person belonging to sponsor(s) has sold/transferred their units of the issuer during the six months preceding the relevant date, the sponsor(s) shall be ineligible for allotment of units on preferential basis.”
The relevant date as per the Circular is, inter alia, the date 30 (thirty) days prior to the date on which the meeting of unitholders is held to consider the preferential issue.
Please find a copy of the circular dated November 17, 2020 here and the Circular dated November 27, 2019 here.
This update has been contributed by Adity Chaudhury (Partner) and Ishita Malhotra (Associate).
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