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IRB Infra, Two Other Firms Get Sebi Nod To Launch InvITs

Sebi had more than two years ago issued guidelines for infrastructure investment trusts.
Sebi had more than two years ago issued guidelines for infrastructure investment trusts.

Mumbai: More than two years after the Securities and Exchange Board of India (Sebi) had issued guidelines for infrastructure investment trusts (InvITs), the markets watchdog has finally granted three companies - IRB Infrastructure, GMR and MEP Infrastructure - to launch the trusts.

Accordingly, these companies will float IRB Invit Fund, GMR Infrastructure Trust and MEP Infrastructure Trust as per Sebi, which is likely to relax norms for the real estate investment trusts (REITs) and InvITs later this month.

With a view to help infra developers mop up funds for long-term projects in a more transparent manner, Sebi had in August 2014 introduced InvITs - an investment vehicle that would enable promoters to monetise completed assets. However, the move failed to get enough attention of businesses owing to taxation issues.

Following this, Sebi recently said its board would look at relaxing the guidelines for both REITs as well as InvITs.

The Sebi board is expected to allow REITs and InvITs to have up to five sponsors, as against the present provision of only three.

Under the proposal for InvITs, Sebi may allow such trusts to invest in a two-level SPV (special purpose vehicle).

Meanwhile, IRB Infrastructure had in a regulatory filing on September 8 announced that IRB InvIT Fund has filed the draft red herring prospectus with Sebi for a Rs 4,300-crore initial public offering.

The Mumbai-based toll road developer is the sponsor of IRB InvIT Fund (the trust) which is registered with Sebi.