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TMI BlogGuidelines for public issue of units of REITsX X X X Extracts X X X X X X X X Extracts X X X X ..... of REIT Regulations. 4. This Circular is available on SEBI website at www.sebi.gov.in under the categories Legal Framework and under the drop down Circulars . Yours faithfully, Richa G. Agarwal Deputy General Manager Investment Management Department Tel No.022-2644 9596 Email id - [email protected] Schedule-A Guidelines for public issue of units of REITs 1. Appointment and obligations of merchant banker and others: (1) The Manager on behalf of the REIT, in line with Regulation 10 (5) of REIT Regulations, shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the merchant banker(s), to carry out the obligations relating to the issue. (2) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document. 2. Filing of offer document (1) Draft offer document, offer document and final offer d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filing of the offer document with the Board and designated stock exchanges; (7) The lead merchant banker shall submit the following documents to the Board along with the offer document: (a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document; (b) a due diligence certificate as per Form B of Annexure I (8) If changes are made in the draft offer document or offer document with respect to any of the following, the lead merchant banker shall file fresh draft offer document with the Board highlighting all changes made in the draft offer document or offer document, as applicable, along with the fees as specified in REIT Regulations: (a) Change in sponsor(s), sponsor group, Manager or persons in control of the sponsor(s)/ Manager. Provided that, in case of change in sponsor group, fresh filing shall be applicable only if the involved sponsor group entity(ies) hold/propose to hold more than 5% of the total units of the REIT after initial offer on a post-issue basis. (b) Change in more than half of the board of directors of the Manager. (c) Change in any object(s) of the issue contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the allocation is made, shall be made available on the website of the stock exchange(s), sponsor(s),manager and merchant banker(s)before opening of the issue. (f) There shall be a lock-in of 30 days on the units allotted to the Anchor Investor from the date of allotment in the public issue. (g) Neither the merchant banker(s) nor any person related to the merchant banker(s) in the concerned public issue can apply under Anchor Investor category except Mutual Funds, Insurance Companies and Pension Funds. (h) The parameters for selection of Anchor Investor shall be clearly identified by the merchant banker(s). 4. Application and Abridged version of the offer document. (1) The application form and the abridged version of the offer document as stated in Regulation 14(13) of the REIT Regulations for the issue shall be prepared by the merchant banker(s). (2) The merchant banker(s) shall make arrangements for distribution of the application form along with a copy of the abridged version of the offer document. (3) The abridged version of the offer document shall contain the disclosures as specified in Annexure III and shall not contain any matter extraneous to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all announce the floor price or price band at least five working days before the opening of the bid (in case of an initial public offer) on the website of the sponsor, manager and stock exchanges and in all the newspapers in which the pre issue advertisement was released and website of REIT, if applicable. (4) The announcement referred to in clause 8(3) above shall contain relevant financial ratios computed for both upper and lower end of the price band and also a statement drawing attention of the investors to the section titled basis of issue price in the offer document. (5) The floor price or price band and the relevant financial ratios referred to in clause 8(4) shall be disclosed on the websites of those stock exchanges where the units are proposed to be listed. (6) The floor price or price band shall be pre-filled in the application forms available on the websites of the stock exchanges. (7) The Manager on behalf of the REIT shall, in consultation with merchant banker(s), determine the issue price based on the bids received. (8) Once the final price (cut-off price) is determined, all those bidders whose bids have been found to be successful (i.e. at and above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Allotment procedure and basis of allotment. (1) On receipt of the sum payable on application, the manager on behalf of the REIT shall allot the units to the applicants. (2) The allotment of units to applicants other than anchor investors shall be on proportionate basis within the specified investor categories and the number of units allotted shall be rounded off to the nearest integer, subject to minimum allotment as per REIT Regulations. (3) In case of under-subscription in any investor category, the unsubscribed portion in either of the category specified in clause 3(1) may be allotted to applicants in the other category. (4) The authorized representatives of the designated stock exchange along with the post issue merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalized in a fair and proper manner. 11. Maintenance of books and records (1) A final book of demand showing the result of the allocation process shall be maintained by the merchant banker(s). (2) The merchant banker(s) and other intermediaries associated in the book building process shall maintain records of the book building prices. (3) The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce any information contained in an offer document, it shall reproduce such information in full and disclose all relevant facts and not be restricted to select extracts relating to that information. (d) it shall be set forth in a clear, concise and understandable language. (e) it shall not include any issue slogans or brand names for the issue except the normal commercial name of the sponsor/manager. (f) it shall not use extensive technical, legal terminology or complex language and excessive details which may distract the investor. (g) it shall not contain statements which promise or guarantee rapid increase in profits /yield/returns (h) it shall not display models, celebrities, fictional characters, landmarks or caricatures or the likes. (i) no issue advertisement shall appear in the form of crawlers (the advertisements which run simultaneously with the programme in a narrow strip at the bottom of the television screen) on television. (j) in any issue advertisement on television screen, the risk factors shall not be scrolled on the television screen and the advertisement shall advise the viewers to refer to the red herring prospectus or other offer document fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchant banker(s) shall continue to be responsible for post-issue activities till the subscribers have received credit to their demat account or refund of application moneys and the listing agreement is entered into by the REIT with the stock exchange and listing/ trading permission is obtained. 15. General conditions: (1) Restrictions on issue: No REIT shall make a public issue of units, if the REIT or parties to the REIT or the promoter(s) or director(s) of parties to the REIT: (a) is debarred from accessing the securities market by the Board; (b) is a promoter, director or person in control of any other company or a sponsor, manager or trustee of any other REIT or REIT which is debarred from accessing the capital market under any order or directions made by the Board; (c) is in the list of the willful defaulters published by the Reserve Bank of India. (2) Alteration of rights of holders of units. No REIT shall alter the terms (including the terms of issue) of units which may adversely affect the interests of the holders of that units unless a resolution to that effect is passed at a meeting of the unitholders in accordance with Regulation 22(5) of REI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGENCE CERTIFICATES FORM A FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT BANKER ALONG WITH DRAFT OFFER DOCUMENT To, Securities and Exchange Board of India Dear Sirs, Sub.: Public Issue of by . (Name of the REIT) We, the merchant banker(s) to the above mentioned forthcoming issue, state and confirm as follows: (1) We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators, etc. and other material in connection with the finalization of the offer document pertaining to the said issue; (2) On the basis of such examination and the discussions with the REIT, its Sponsor(s) and/or sponsor group and Manager, directors and other officers, other agencies, and independent verification of the statements concerning the terms of the issue, price justification and the contents of the documents and other papers furnished by the Manager, we confirm that: (a) the draft offer document filed with the Board is in conformity with the documents, materials and papers relevant to the issue; (b) all the legal requirements relating to the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We enclose a checklist confirming regulation-wise compliance with the applicable provisions of the REIT Regulations, containing details such as the regulation number, its text, the status of compliance, page number of the draft offer document where the regulation has been complied with and our comments, if any. (11) We enclose a checklist confirming clause-wise compliance with the guidelines for public offer issued under the REIT Regulations. (12) We certify that profits from related party transactions have arisen from legitimate business transactions. Place: Merchant Banker(s) to the Issue Date: with Official Seal(s) FORM B FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT BANKER AT THE TIME OF FILING OFFER DOCUMENT WITH THE BOARD AND THE DESIGNATED STOCK EXCHANGE To, Securities and Exchange Board of India Dear Sirs, Sub.: Public Issue of .. by (Name of the REIT) (1) This is to certify that the offer document filed with the Board and Stock Exchanges has been suitably updated and that the said offer document contains all the material disclosures in respect of the REIT as on the said da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certify that provisions regarding lock-in of units held by persons other than sponsors and/or sponsor group have been duly complied with in accordance with REIT Regulations. Place: Merchant Banker(s) to the Issue Date: with Official Seal(s) 17 ANNEXURE II FORMATS OF POST ISSUE REPORTS PART A FORMAT OF INITIAL POST ISSUE REPORT FOR PUBLIC ISSUE Subscription Status: (Subscribed/ Undersubscribed) Note: It is the responsibility of merchant banker(s) to give correct information after verifying it from the Manager and the registrar to the issue. (1) Name of the REIT : (2) Issue opening date : (3) Earliest closing date : (4) Actual closing date : (5) Date of filing offer document with Board : (6) Issue Details (as per the offer document) (a) Offer price per unit : (b) Issue size: (Rs lakhs) i. Sponsors and/or sponsor group contribution : ii. Amount through offer document: (c) Provisional subscription details of public offer i. Total amount to be collected on application: Rs lakhs ii. Amount collected on application: Rs lakhs iii. % subscribed i.e. % of (ii) to (i): (%) (7) Please tick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exchange (Enclose copies of permission letters of stock exchanges) : (19) Reasons for delay in listing of units for trading, if any : (II) IN CASE OF UNDER SUBSCRIBED ISSUE: (1) If the issue is underwritten, mention the amount of issue underwritten : (2) Extent of under subscription on the date of closure of the issue (a) Percentage : (b) Amount : (3) Total no. of underwriters : (4) If devolvement notices had not been issued, mention how the shortfall was met : (5) No. of underwriters to whom devolvement notices had been issued : (6) Date of issue of devolvement notices : (7) No. of underwriters who did not pay devolvement (Please give names, amount underwritten and reasons for not paying) : (8) In case of default from underwriters, mention how the shortfall was met : (9) In case where FIs/ MFs had subscribed to make up shortfall not as underwriter : (a) Name of FI/MF : (b) No. of units applied for : (c) Amount received : Certified that the information given above and also in the enclosures are true to the best of our knowledge and no refunds/ allotment are pending in respect of the issue. Certified that units to be locked in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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