Sebi Proposes Amendments To Provisions For Public Listing of Privately Listed InvITs

Sebi InvIT Regulations Latest: Capital market regulator Securities Exchange Board of India has proposed to modify the framework governing the conversion of privately listed InvITs (Infrastructure Investment Trusts) to publicly listed InvITs in a draft circular dated July 1. Notably, the proposed amendments to Sebi’s existing norms seek to increase the ease of doing business for InvITs.

The market regulator mentioned in the draft circular that it has proposed to tweak the provisions which mandate the minimum sponsor contribution for InvITs and the lock-in period for the contribution. Minimum sponsor contribution refers to the amount of money initially invested by the sponsor entity of an InvIT to establish the trust and purchase its underlying assets. The market regulator has proposed to change the lock-in period for those units held in addition to the minimum contribution by the sponsor.

“It is proposed to omit the provisions in the Master Circular pertaining to minimum sponsor contribution, lock-in on minimum sponsor contribution and lock-in on units held by the sponsor in excess of minimum contribution, on conversion of private listed InvIT into public InvIT,” Sebi said in the draft circular.

As per the current norms for conversion of privately listed InvITs into publicly listed InvITs, the minimum sponsor contribution has to be 15 per cent of the units issued via the public issue. Alternatively, the minimum sponsor contribution can also be around 15 per cent of the post-issue capital. Additionally, the current public listing norms also mandate that units which are in excess of the minimum sponsor contribution need to be held for a lock-in period of 1 year from the date of listing of the InvIT.

The market watchdog has also proposed to scrap the lock-in period requirement for the units of the InvIT, which have been held by individuals prior to the issue. Notably, the proposal only seeks to scrap the lock-in period requirement for units held by individuals other than the sponsor of the InvIT. Presently, Sebi’s Master Circular for InvITs states that entities other than the sponsor need to hold the units they owned prior to the issue for a lock-in period of 1 year from the date of listing.

The market regulator mentioned in the draft circular that the rationale behind removing the lock-in period is to make the units of the InvIT easier to trade. Sebi said that since investors put their money in InvITs to trade the units, the imposition of a lock-in hurts them, as a lock-in makes the units ‘non-tradable’. According to the market regulator, such an arrangement also contradicts the larger goals of publicly listing InvITs, which include increasing market liquidity and investor participation.

“In view of the above and to promote ease of doing business, it is proposed to omit the provisions in the Master Circular pertaining to lock-in on units held prior to the issue by persons other than the sponsor,” Sebi said in the circular.

The market regulator also proposed to align the procedure and disclosure requirements for privately listed InvITs which are converting to publicly listed InvITs with the disclosure requirements for follow-on offers. The market regulator cited stakeholders in the draft circular and said that the public issue of units of a privately listed InvIT is an offer of units which comes after an initial offer; thus, the disclosure requirements should be rationalised accordingly.

“…it is proposed that the procedure and disclosure requirements for the public issue of units as applicable for a follow-on offer shall apply for the offer of units made to the public to convert a private listed InvIT into a public InvIT,” Sebi said in the circular.

The market watchdog has sought comments on the draft circular and the proposed amendments from industry stakeholders. The last date to send comments and responses is July 22, 2025.