Sebi tweaks pricing methodology for institutional placement by privately placed InvITs

Under the new guidelines, privately placed InvITs can undertake institutional placement based on net asset value (NAV) of InvIT's assets.

New Delhi: Capital markets regulator Sebi on Thursday came out with revised pricing guidelines for institutional placements by privately placed infrastructure investment trusts (InvITs) in a bid to promote ease of doing business.

Under the new guidelines, privately placed InvITs can undertake institutional placement based on net asset value (NAV) of InvIT’s assets.

---

“The institutional placement by privately placed InvIT shall be made at a price not less than the NAV per unit, based on the full valuation of all existing InvIT assets conducted in terms of InvIT Regulations,” the Securities and Exchange Board of India (Sebi) said in a circular.

As per the current rule, the institutional placement by InvIT needs to be made at a price not less than the average of the weekly high and low of the closing prices of the units of the same class quoted on the stock exchange during the two weeks preceding the relevant date.

The decision has been taken based on the request of the industry in respect of pricing for institutional placement by privately placed InvIT and recommendation of Sebi’s Hybrid Securities Advisory Committee.

Sebi’s InvIT rule provides that any subsequent issue of units after initial public offer may be by way of institutional placement, in addition to other mechanisms provided in the regulations.

InvITs is a new concept in the Indian market but has been a popular choice in the global markets for their lucrative returns and capital appreciation. InvITs consist of a portfolio of infrastructure assets like highways, etc.

The new guidelines will be applicable with immediate effect, Sebi said.