Financial impact: Sebi steps in to infuse Rs 1 trillion

Minimum subscription size of units of REITs and InvITs has been kept at Rs 2 lakh

Mumbai: The Securities and Exchange Board of India (Sebi) on Sunday approved the final guidelines for real estate investment trusts (REITs) and infrastructure investment trusts (InvIT), a move expected to boost capital inflows of about Rs 1 lakh crore into cash-starved real-estate and infrastructure projects.

The capital market regulator’s industry-friendly decision relaxed some of the stringent provisions of the draft Sebi (REIT) Regulations, 2013.

Accordingly, the Sebi board, which met on Sunday, decided to halve the minimum size of assets under REITs from Rs 1,000 crore to Rs 500 crore, which would encourage commercial real estate developers from even Tier-II and Tier-III cities to participate in the REITs market.

The minimum subscription size of units of REITs and InvITs has been kept at Rs 2 lakh, which is expected to attract participation from retail investors.
Besides this, finance minister Arun Jaitley nudged the RBI to cut interest rates, which will further spur industrial growth. “I, on the same evening (June 3 and August 5), already issued a clear statement and I think that’s very clear.

This is an issue that the RBI decides and I am sure they factor in various circumstances,” Mr Jaitley said after addressing the central board of the Reserve Bank. In the last two credit policies announced after the formation of the BJP-led NDA government, the RBI had maintained status quo on interest rates.

( Source : dc correspondent )
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