The Securities and Exchange Board of India (SEBI) has extended the deadline for submission of comments on Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to March 15, 2021. The move comes after stakeholders requested an extension, citing the need for more time to prepare their feedback.
The regulator had released a consultation paper on December 23, 2020, seeking public comments on proposed norms for REITs and InvITs. The paper proposed changes to the regulations governing the formation, listing, and trading of these investment vehicles, with the aim of making them more attractive to investors and issuers.
REITs and InvITs are emerging as popular investment options in the Indian market, with several companies exploring the option of launching these instruments. These investment vehicles allow investors to invest in real estate and infrastructure projects indirectly, without having to own the assets directly.
The proposed changes to the regulations governing REITs and InvITs are aimed at encouraging more companies to launch these instruments, and make them more attractive to investors. Some of the key changes proposed in the consultation paper include allowing REITs to invest in under-construction projects, reducing the mandatory sponsor holding period from three to two years, and providing tax benefits to investors.
The extension of the deadline for submission of comments comes as a relief to stakeholders who were struggling to meet the original deadline of February 15, 2021. The consultation paper had generated a lot of interest among investors, issuers, and market participants, and the regulator had received several requests for an extension of the deadline.
SEBI has stated that it will provide sufficient time to stakeholders to submit their feedback and will carefully consider all the comments received before finalizing the regulations. The regulator has emphasized that it is committed to promoting the development of the REITs and InvITs market in India, and believes that these instruments can play a crucial role in channeling investment into the real estate and infrastructure sectors.
The move to extend the deadline for submission of comments also reflects SEBI’s commitment to ensuring that the public consultation process is conducted in a transparent and inclusive manner. The regulator has stated that it will take all necessary steps to ensure that the views of all stakeholders are taken into account before finalizing the regulations.
Several market participants have welcomed the move to extend the deadline, saying that it will give them more time to prepare their feedback and provide detailed comments on the proposed changes. They also believe that the proposed changes, if implemented, will go a long way in developing the REITs and InvITs market in India.
Real estate developers, in particular, have welcomed the proposal to allow REITs to invest in under-construction projects, saying that it will provide a much-needed boost to the construction industry, which has been hit hard by the COVID-19 pandemic. The proposal to reduce the mandatory sponsor holding period from three to two years has also been well received, as it will make it easier for companies to launch REITs and InvITs.
Investors too, have welcomed the proposed changes, saying that it will make REITs and InvITs more attractive investment options, and provide them with more diversification opportunities. The proposal to provide tax benefits to investors has been particularly well received, as it will help to attract more retail investors to these instruments.
In conclusion, the move to extend the deadline for submission of comments on REITs and InvITs is a positive step towards promoting the development of these instruments in India. SEBI’s commitment to promoting transparency and inclusiveness in the consultation process is commendable, and it is hoped that the proposed changes, if implemented, will go a long way in making REITs and InvITs more accessible to investors and issuers alike.