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TMI BlogGuidelines for public issue of units of InvITsX X X X Extracts X X X X X X X X Extracts X X X X ..... 33 of InvIT 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 InvITs 1. Appointment and obligations of merchant banker and others: (1) The Investment Manager on behalf of the InvIT, in line with Regulation 10 (5) of InvIT 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 lead merchant banker, 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aft offer document are suitably addressed prior to the 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 InvIT Regulations: (a) Change in sponsor(s)/ Investment Manager or persons in control of the sponsor(s)/ Investment Manager. (b) Change in more than half of the board of directors of the Investment Manager. (c) Change in any object(s) of the issue contributing/amounting to more than 20% of the issue size. (d) Any increase or decrease in estimated issue size by more than twenty five per cent. (9) All other changes/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e number of units allocated to Anchor Investors and the price at which the allocation is made, shall be made available on the website of the stock exchange(s), sponsor(s), investment manager and merchant banker(s) before opening of the issue. (g) 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. Provided that the lock-in for strategic investors shall be one year from the date of allotment in the public issue. (h) Neither the merchant bankers nor any person related to the merchant bankers in the concerned public issue can apply under Anchor Investor category except Mutual Funds, Insurance Companies and Pension Funds. (i) The parameters for selection of Anchor Investor shall be clearly identified by the merchant banker. 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(4)(n) of the InvIT Regulations for the issue shall be prepared by the lead merchant banker. (2) The lead merchant banker shall make arrangements for distribution of the application form along with a copy of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment manager on behalf of the InvIT may determine the price of units in consultation with the lead merchant banker or through the book building process. (2) Differential price shall not be offered to any investor. (3) The investment manager on behalf of the InvIT shall 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, investment manager and stock exchanges and in all the newspapers in which the pre issue advertisement was released and website of InvIT, 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 final 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (10) The identity of Institutional Investors other than strategic investors making the bidding shall not be made public. (11) The stock exchanges shall continue to display on their website, the data pertaining to book built issues in a uniform format, inter alia giving category-wise details of bids received, for a period of atleast three days after closure of bids. 10. Allotment procedure and basis of allotment. (1) On receipt of the sum payable on application, the investment manager on behalf of the InvIT 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 InvIT 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 lead merchant bankers and registrars to the issue shall ensure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following: (a) it shall be truthful, fair and shall not be manipulative or deceptive or distorted. (b) it shall not contain any statement or promise which is untrue or misleading. (c) if it reproduces or purports to reproduce 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/investment 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 display models, celebrities, fictional characters, landmarks or caricatures or the likes. (h) 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. (i) in any issue advertisement on television screen, the risk factors shall not be scrolle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investors response to the issue, during the period when the public issue is still open for subscription by the public. (5) The post-issue merchant banker 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 InvIT with the stock exchange and listing/ trading permission is obtained. 15. General conditions: (1) Restrictions on issue : No InvIT shall make a public issue of units, if the InvIT or parties to the InvIT or the promoter(s) or director(s) of parties to the InvIT: (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, investment manager or trustee of any other InvIT or InvIT 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 InvIT shall alter the terms (including the terms of issue) of units which may adversely affect the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported to the recognised stock exchanges where the units of the InvIT are listed or going to be listed, within twenty four hours of the transactions. 16. Power to relax strict enforcement of these guidelines. The Board may, in the interest of investors or for the development of the securities market, relax the strict enforcement of any requirement of these guidelines, if the Board is satisfied that: (1) the requirement is procedural in nature; or (2) any disclosure requirement is not relevant for a particular sector/sub-sector or InvIT; or (3) the non-compliance was caused due to factors beyond the control of the InvIT. (4) any provision of Act(s), Rule(s), regulation(s) under which the InvIT is established or is governed by, is required to be given precedence to; or (5) the requirement may cause undue hardship to investors. ANNEXURE I FORMATS OF DUE DILIGENCE 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 InvIT) We, the lead merchant banke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirm that the agreement entered into between the bankers to the issue and the Investment manager on behalf of the InvIT specifically contains this condition. (8) We certify that the following disclosures have been made in the draft offer document: (a) An undertaking from the Investment manager on behalf of the InvIT that at any given time, there shall be only one denomination for the units of the InvIT and (b) An undertaking from the Investment manager on behalf of the InvIT that it shall comply with such disclosure and accounting norms specified by the Board from time to time. (9) We enclose a note explaining how the process of due diligence has been exercised by us with respect to the nature of the assets, the risk factors, net worth and experience of the sponsor/investment manager, experience of the key personnel, etc. (10) We enclose a checklist confirming regulation-wise compliance with the applicable provisions of the InvIT 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GIVEN BY MERCHANT BANKER ALONG WITH FINAL POST ISSUE REPORT To, Securities and Exchange Board of India Dear Sirs, Sub.: Public issue of by (Name of InvIT) We, the under noted post issue lead merchant bankers to the abovementioned issue state as follows: (1) We confirm that (a) for the units offered for lock-in, non-transferability details have been informed to the depositories; (b) details of lock-in have been provided to all the stock exchanges on which units are to be listed, before the listing of the units. (2) We certify that units included as minimum sponsors contribution and the units in excess of minimum sponsors contribution have been locked-in in terms of Regulation 12 of the InvIT Regulations. (3) We certify that provisions regarding lock-in of units held by persons other than sponsors have been duly complied with in accordance with InvIT Regulations. Merchant Banker(s) to the Issue with Official Seal(s) Place : Date : ANNEXURE II FORMATS OF POST ISSUE REPORTS PART A FORMAT OF INITIAL POST ISSUE REPORT FOR PUBLIC ISSUE Subscription Status: (Subscribed/ Undersubscribed) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received : Rs. (iv) No. of times issue subscribed : (9) Actual Date of finalisation of Basis of Allotment (enclose copy) : (10) Allotment Details : (a) No. of successful allottees : (b) No. of unsuccessful allottees : (11) Actual Date(s) of completion of : (a) Allotment : (b) Refund : (c) Reasons for delay in allotment/refund, if any : (d) Whether interest paid for delayed period, if so, for which period : (12) Amount of refund due : Rs. (13) Refund Banker(s) (Name and Address): (14) Date of transfer of refund amount to Refund Banker, if any : (15) Name of Designated Stock Exchange : (16) Names of other stock exchanges where listing is sought : (17) Date on which application was filed with each stock exchange for listing of units : (18) Date when listing and trading permission given by each stock 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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