Section 14 in Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014
14. Issue of units and allotment.
(1)No initial offer of units by an InvIT shall be made unless, -(a)The InvIT is registered with the Board under these regulations;(b)the value of [InvIT assets] [Substituted 'the assets held by the InvIT' by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] is not less than rupees. five hundred crore.Explanation. - Such value shall mean the value of the specific portion of the holding of InvIT in the underlying assets or [holdco or] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] SPVs;(c)the offer size is not less than rupees two hundred fifty crore:Provided that the requirement of ownership of assets under clause (b) and offer size under clause (c) may be complied [at any point of time before allotment of units in accordance with offer document/placement memorandum] [Substituted 'with after initial offer or first offer of units under private placement' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] subject, to a binding agreement with the relevant party(ies) that [such] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] the requirements shall be fulfilled prior to [such] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] allotment of units, [and] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] a declaration to the Board and [to] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).]the designated stock exchanges to that effect, where applicable and adequate disclosures in this regard in the [***] [Omitted 'initial' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document or placement memorandum.(1A)[ The minimum offer and allotment to public through an offer document/placement memorandum shall be,-(a)atleast twenty five per cent. of the total outstanding units of the InvIT, if the post issue capital of the InvIT calculated at offer price is less than rupees one thousand six hundred crore:Provided that this requirement shall be complied along with the requirement under Regulation 14(1)(c) of the InvIT Regulations.(b)of the value of atleast Rs 400 crore, if the post issue capital of the InvIT calculated at offer price is equal to or more than rupees one thousand six hundred crore and less than rupees four thousand crore;(c)atleast ten per cent. of the total outstanding units of the InvIT, if the post issue capital of the InvIT calculated at offer price is equal to or more than rupees four thousand crore:Provided that any units offered to sponsor or the investment manager or the project manager or their related parties or their associates shall not be counted towards units offered to the public.Provided further that any listed InvIT which has public holding below twenty five per cent on account of sub-clauses (b) and (c) above, such InvIT shall increase its public holding to at least twenty five per cent, within a period of three years from the date of listing pursuant to initial offer.] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](2)If the InvIT [raises funds by way of private placement] [Substituted 'invests or proposes to invest in under-construction projects, value of which is more than ten per cent. of the value of the InvIT assets, it shall raise funds' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).],-(a)[it shall do it] [Substituted 'by way of private placement only' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] through a placement memorandum;(b)from [institutional investors] [Substituted 'qualified institutional buyers' by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] and body corporate only, whether Indian or foreign:Provided that in case of foreign investors, such investment shall be subject to guidelines as may be specified by Reserve Bank of India and the government from time to time;(c)with minimum investment from any investor of rupees one crore;[Notwithstanding the above, if such an privately placed InvIT invests or proposes to invest not less than eighty per cent of the value of the InvIT assets, [in completed and revenue generating assets] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] the minimum investment from an investor shall be rupees twenty five crore;](d)from not less than five and not more than one thousand investors.(e)[ shall file a placement memorandum with the Board alongwith the fee as specified in Schedule II, atleast 5 days prior to opening of the issue: [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).]Provided that such opening of the issue shall not be at a date later than 3 months from the receipt of in-principle approval for listing, from exchange(s).](f)[ it shall file the final placement memorandum with the Board within a period of ten working days from the date of listing of the units issued therein.] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).](3)[ ***] [Omitted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](4)[If the InvIT raises funds by public issue] [Substituted 'With respect to' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] [*] [Omitted 'InvITs' by Notification No. SEBI/LAD-NRO/G.N./2017-18/024, dated 15.12.2017 (w.e.f. 26.9.2014).] [*] [Omitted 'that hold not less than eighty per cent. of its assets in completed and revenue generating infrastructure projects' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).],-(a)[ it shall be by way of initial public offer;] [Substituted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](b)any subsequent issue of units after initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer may be by way of follow-on offer, preferential allotment, qualified institutional placement, rights issue, bonus issue, offer for sale or any other mechanism and in the manner as may be specified by the Board;(c)minimum subscription from any investor in initial and follow-on offer shall be [one] [Substituted 'ten' by Notification No. SEBI/LAD-NRO/GN/2019/10, dated 22.4.2019.] lakh rupees ;(d)[ ***] [Omitted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](e)prior to initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer and follow-on offer, the [merchant banker] [Substituted 'investment manager' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] shall file the draft offer document [along with the fee as specified in Schedule II] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] with the designated stock exchange(s) and the Board not less than [thirty] [Substituted 'twenty one' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] working days before filing the [***] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document with the designated stock exchange [and SEBI] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).];(f)the draft offer document filed with the Board shall be made public, for comments, if any, [***] [Omitted 'to be submitted to the Board, within a period of at least ten days' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).], by hosting it on the websites of the Board, designated stock exchanges [, InvIT] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] and merchant bankers associated with the issue [for a period of not less than twenty one days] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).];(g)the Board may communicate its comments to the lead merchant banker and, in the interest of investors, may require the lead merchant banker to carry out such modifications in the draft offer document as it deems fit;(h)the lead merchant banker shall ensure that all comments received from the Board on the draft offer document are suitably addressed prior to the filing of the [***] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document with the designated stock exchanges;(i)in case no [observations] [Substituted 'modifications' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] are [issued] [Substituted 'suggested' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] by the Board in the draft offer document within twenty one working days from the date of receipt of satisfactory reply from the lead merchant bankers or manager, the InvIT may [file] [Substituted 'issue' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] the [***] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document or follow-on offer document [with the Board and the exchange(s)] [Substituted 'to the public' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).];(j)the draft [offer document] [Inserted by Notification No. SEBI/LAD-NRO/GN/2018/07, dated 10.4.2018 (w.e.f. 26.9.2014).] and [*] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document shall be accompanied by a due diligence certificate signed by the [*] [Omitted 'investment manager and' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] lead merchant banker;(k)the [*] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document shall be filed with the designated stock exchanges and the Board not less than five working days before opening of the offer [*] [Omitted 'and such filing with the Board shall be accompanied by filing fees as specified under Schedule II' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).];(l)The InvIT may [open] [Substituted 'make' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] the initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer or follow-on offer [or rights issue] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] within a period of not more than [one year] [Substituted 'six months' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] from the date of [*] [Omitted 'last' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] issuance of observations by the Board, [*] [Omitted 'if any and if no observations have been issued by the Board, within six months from the date of filing of final offer document with the designated stock exchanges:' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).]Provided that if the initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer or follow-on offer [or rights issue] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] is not made within the prescribed time period, a fresh [draft] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document shall be filed;[Provided further that the InvIT shall not be required to file draft offer document with the Board in case of a fast track rights issue, subject to the fulfillment of the conditions as specified by the Board from time to time.] [Inserted by Notification No. SEBI/LAD-NRO/GN/2020/05, dated 2.3.2020 (w.e.f. 26.9.2014).](m)The InvIT may invite for subscriptions and allot units to any person, whether resident or foreign:Provided that in case of foreign investors, such investment shall be subject to guidelines as may be specified by Reserve Bank of India and the government from time to time.(n)the application for subscription shall be accompanied by a statement containing the abridged version of the offer document detailing the risk factors and summary of the terms of issue;(o)initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer and follow-on offer shall not be open for subscription for a period of more than thirty days;(p)in case of over-subscriptions, the InvIT shall allot units to the applicants on a proportionate basis rounded off to the nearest integer subject to minimum subscription amount per subscriber as specified in clause (c);(q)the InvIT shall allot units or refund application money,as the case may be, within twelve working days from the date of closing of the issue;(r)the InvIT shall issue units in only in dematerialized form to all the applicants;(s)the price of InvIT units issued by way of public issue shall be determined through the book building process or any other process in accordance with the guidelines issued by the Board and in the manner as may be specified by the Board;(t)the InvIT shall refund money,-(i)to all the applicants in case it fails to collect subscription of atleast [ninety] [Substituted 'seventy five' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] per cent. of the [fresh] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] issue size as specified in the [***] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document;(ii)to applicants to the extent of the over subscription, in case the moneys received is in excess of the extent of over-subscription as specified in the [***] [Omitted 'final' by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer document, money shall be refunded to applicants to the extent of the oversubscription:Provided that right to retain such over subscription cannot exceed twenty five per cent. of the issue size;[Provided further, that the offer document shall contain adequate disclosures towards the utilisation of such oversubscription proceeds, if any, and such proceeds retained on account of oversubscription shall not be utilised towards general purposes.] [Added by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](iii)to all the applicants, in case the number of subscribers to the initial [public] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] offer forming part of the public is less than twenty;(u)If the investment manager fails to allot or list the units or refund the money within the specified time, then the investment manager shall pay interest to the unit holders at the rate of fifteen per cent. per annum, till such allotment or listing or refund and such interest shall be not be recovered in the form of fees or any other form payable to the investment manager by the InvIT;(v)units may be offered for sale to public,-i. if such units have been held by the sellers for a period of at least one year prior to the filing of draft offer document with the Board:Provided that the holding period for the equity shares [, compulsorily convertible securities (from the date such securities are fully paid-up)] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2017-18/024, dated 15.12.2017 (w.e.f. 26.9.2014).] or partnership interest in the [holdco or] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).] SPV against which such units have been received shall be considered for the purpose of calculation of one year period referred in this sub-regulation;[Provided further that the compulsorily convertible securities, whose holding period has been included for the purpose of calculation for offer for sale, shall be converted to equity shares of the holdco or SPV, prior to filing of offer document.] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2017-18/024, dated 15.12.2017 (w.e.f. 26.9.2014).]ii. subject to other guidelines as may be specified by the Board in this regard;(va)[ The amount for general purposes, as mentioned in objects of the issue in the draft offer document filed with the Board, shall not exceed Ten per cent of the amount raised by the InvIT by issuance of units.] [Inserted by Notification No. SEBI/LAD-NRO/G.N./2016-17/021, dated 29.11.2016 (w.e.f. 26.9.2014).](5)If the InvIT fails to make any offer of its units, whether by way of public issue or private placement, within three years from the date of registration with the Board, it shall surrender its certificate of registration to the Board and cease to operate as an InvIT:Provided that the Board, if it deems fit, may extend the period by another one year:Provided further that the InvIT may later re-apply for registration, if it so desires.(6)The Board may specify by issue of guidelines or circulars any other requirements, as it deems fit, pertaining to issue and allotment of units by an InvIT, whether by way of public issue or private placement.
