REAL ESTATE INVESTMENT

TRUSTS REGULATIONS,
2014
 DEFINITIONS
 HOLDCO MEANS A COMPANY OR LLP
◦ (I) IN WHICH REIT HOLDS OR PROPOSES TO HOLD
CONTROLLING INTEREST OF NOT LESS THAN FIFTY ONE PER
CENT OF THE EQUITY SHARE CAPITAL OR INTEREST AND
WHICH IN TURN HAS MADE INVESTMENTS IN OTHER SPV(S),
WHICH ULTIMATELY HOLD THE PROPERTY(IES);
◦ (II) WHICH IS NOT ENGAGED IN ANY OTHER ACTIVITY OTHER
THAN HOLDING OF THE UNDERLYING SPV(S), HOLDING OF
REAL ESTATE/PROPERTIES AND ANY OTHER ACTIVITIES
PERTAINING TO AND INCIDENTAL TO SUCH HOLDINGS;
 NET ASSET VALUE
◦ VALUE OF THE ASSETS HELD BY THE REIT REDUCED BY THE DEBT DIVIDED
BY THE NUMBER OF UNITS HELD
 REIT
◦ MEANS THE TRUST REGISTERED UNDER THESE REGULATIONS
 TDR OR TRANSFERABLE DEVELOPMENT RIGHTS
MEANS THE DEVELOPMENT RIGHTS ISSUED BY THE
COMPETENT AUTHORITY IN LIEU OF AREA
RELINQUISHED OR SURRENDERED BY THE OWNER OR
DEVELOPER
 REIT ASSETS
◦ THE REAL ESTATE ASSET AND ANY OTHER ASSET OWNED BY
THE REIT EITHER DIRECTLY OR THROUGH A HOLD CO OR
THROUGH A SPV
 SPV
◦ MEANS AN ENTITY IN WHICH THE REIT HOLDS CONTROLLING
INTEREST OR HOLDS NOT LESS THAN 51% OF THE EQUITY
AND HOLDS NOT LESS THAN 80% OF THE ASSETS AND DOES
NOT INVEST IN ANY OTHER SPV
 SPONSOR
 WHO SETS UP THE REIT AND IS DESIGNATED AS SUCH AT
THE TIME OF MAKING THE APPLICATION TO SEBI
◦ SPONSOR GROUP
 IN CASE SPONSOR IS A BODY CORPORATE
 ENTITIES OR PERSONS WHICH ARE CONTROLLED BY
SUCH BODY CORPORATE
 ENTITIES OR PERSON WHO CONTROL SUCH A BODY
CORPORATE
 ENTITIES OR PERSONS WHICH ARE CONTROLLED BY
PERSONS REFERRED ABOVE
 IN CASE SPONSORE IS AN INDIVIDUAL
 IMMEDIATE RELATIVES OF SUCH AN INDIVIDUAL
 ENTITIES AND PERSONS WHICH ARE CONTROLLED BY
SUCH AN INDIVIDUAL
 REGISTRATION
 REIT IS TO BE ORGANISED AS TRUST
 THE APPLICATION IS TO BE MADE BY THE SPONSOR
 THE TRUST DEED SHALL STATE THAT THE MAIN ACTIVITY
SHALL BE UNDERTAKING THE ACTIVITY OF AN REIT
 THE TRUSTEE, SPONSOR, MANAGER SHALL BE SEPARATE
ENTITIES
 EACH SPONSOR SHALL HOLD ATLEAST 5% OF THE UNITS OF
THE REIT ON A POST INITIALOFFER BASIS
 SPONSORS COLLECTIVELY HAVE A NETWORTH OF Rs.100
CRORES
 INDIVIDUALLY A NETWORTH OF ATLEAST Rs.20 CRORES
 SPONSOR HAS ATLEAST FIVE YEARS EXPERIENCE IN THE
REAL ESTATE INDUSTRY. WHERE SPONSOR IS A DEVELOPER,
SHOULD HAVE COMPLETED ATLEAST TWO PROJECTS
 ELIGIBILITY OF THE MANAGER
◦ NETWORTH OF ATLEAST RS.10 CRORES
◦ EXPERIENCE OF ATLEAST 5 YEARS IN FUND
MANAGEMENT IN THE REAL ESTATE SECTOR
◦ HAS 2 PERSONS AS KMPs WHO HAVE ATLEAST 5
YEARS EXPERIENCE IN FUND MANAGEMENT OR
PROPERTY MANAGEMENT IN THE REAL ESTATE
SECTOR
◦ 50% OF ITS BOARD IS INDEPENDENT
◦ ENTERED INTO AN AGREEMENT WITH THE
TRUSTEE FOR MANAGING THE FUNDS
 ELIGIBILITY OF THE TRUSTEE
◦ MUST BE A DEBENTURE TRUSTEE REGISTERED WITH SEBI
◦ NOT AN ASSOCIATE OF THE SPONSOR OR MANAGER
◦ HAS NECESSARY INFRASTRUCTURE AND PERSONNEL
 APPLICATION HAS DESCRIBED THE ACTIVITIES OF
THE REIT
 NO UNITS OF THE REIT SHOULD ENJOY SUPERIOR
RIGHTS
 FIT AND PROPER PERSONS
 NO PREVIOUS APPLICATION SHOULD HAVE BEEN
REJECTED BY SEBI
 NO DISCIPLINARY ACTION HAS BEEN TAKEN
 OBLIGATIONS
 OF THE TRUSTEE
◦ SHALL HOLD THE REIT ASSETS ON BEHALF OF THE UNIT
HOLDERS
◦ SHALL OVERSEE THE ACTIVITIES OF THE MANAGER
◦ SHALL ENSURE THAT THE MANAGER COMPLIES WITH THE
REPORTING AND DISCLOSURE REQUIREMENTS
◦ SHALL REVIEW THE TRANSACTIONS CARRIED OUT
BETWEEN THE MANAGER AND ITS ASSOCIATES. WHERE IT
IS AN RPT, A CERTIFICATE FROM THE CA OR VALUER THAT
THE TRANSACTION IS ON AN ARMS LENGTH BASIS
◦ PERIODICALLY REVIEW THE STATUS OF THE UNIT HOLDERS’
COMPLAINTS
◦ SHALL MAKE DISTRIBUTION IN ACCORDANCE WITH THE
REGUALATIONS
 ENSURE THAT THE MANAGER SETS UP SYSTEMS AND
REPORT TO THE TRUSTEES
 SHALL ENSURE THAT THE SUBSCRIPTION AMOUNT IS
KEPT IN A SEPARATE BANK ACCOUNT
 THE REMUNERATION OF THE VALUER IS NOT LINKED
TO THE VALUE OF THE ASSET
 ENSURE THAT THE MANAGER CONVENES THE
MEETING OF UNIT HOLDERS AND WILL OVERSEE THE
VOTING
 SHALL NOT INVEST IN THE REIT FOR WHICH IT IS A
TRUSTEE
 INFORM SEBI IN CASE ANY ACTIVITY IS DETRIMENTAL
TO THE INTEREST OF THE UNIT HOLDERS
 OF THE MANAGER
◦ SHALL TAKE ALL THE INVESTMENT DECISIONS
◦ ALL THE PROPERTY IN WHICH INVESTED HAS A LEGAL
TITLE
◦ APPOINT VALUER, AUDITOR, MERCHANT BANKER, RTA
ETC AS REQUIRED FROM TIME TO TIME
◦ ADEQUATE INSURANCE COVERAGE
◦ ADEQUATE INFRASTRUCTURE AND KEY MANAGERIAL
PERSONNEL
◦ RESPONSIBLE FOR THE FILING OF OFFER DOCUMENT
AND LISTING OF THE UNITS
◦ DISTRIBUTION OF THE RETURNS
◦ REDRESSING THE INVESTOR GRIEVANCES
◦ SHALL NOT OBTAIN ANY COMMISION OR
PAYMENTS EXCEPT WHAT IS SPECIFIED
◦ SHALL SUBMIT QUARTERLY REPORTS OF
AMOUNTS RECEIVED, PAYMENTS MADE, UNDER
CONSTRUCTION PROJECTS WITHIN ONE MONTH
OF THE QUARTER TO THE TRUSTEE
◦ COMPUTATION OF NAV DONE BY A VALUER
ATLEAST TWICE A YEAR AND DISCLOSED WITHIN
15 DAYS OF COMPLETION OF VALUATION
◦ DESIGNATE A COMPLIANCE OFFICER
◦ CALL MEETINGS OF THE UNIT HOLDERS
◦ MAINTAIN RECORDS
 OF THE SPONSOR
 SETS UP THE REIT
 APPOINTS A TRUSTEE
 TRANSFERS ENTIRE HOLDING IN HOLD CO OR CONTROLLING
INTEREST IN SPV TO THE REIT
 ALL SPONSORS COLLECTIVELY SHALL HOLD A MINIMUM OF
25% OF THE TOTAL UNITS OF THE REIT, WHICH SHALL NOT BE
TRANSFERABLE FOR A PERIOD OF 3 YEARS AFTER INITIAL
OFFER
 INDIVIDUALLY HOLD ATLEAST 5% OF THE UNITS
 HOLD NOT LESS THAN 15% OF THE OUTSTANDING UNITS OF
THE REIT AT ALL TIMES
 IF THEY SELL AFTER THREE YEARS, THE NEW PERSON SHALL
BE REDESIGNATED AS A SPONSOR, WHO SHALL OBTAIN
APPROVAL FROM THE UNIT HOLDERS OR PROVIDE EXIT
 OF THE VALUER
◦ TO GIVE A TRUE AND FAIR VIEW
◦ HAVE ROBUST INTERNAL CONTROLS
◦ ADEQUATE KEY PERSONNEL
◦ CONDUCT IN A TRANSPARENT MANNER
◦ NEITHER VALUER NOR ANY OF HIS EMPLOYEES SHALL
HOLD ANY REIT ASSETS OR REIT UNITS
◦ SHOULD NOT ACCEPT REMUNERTION FROM ANY OTHER
PERSON OTHER THAN THE REIT
 OF THE AUDITOR
◦ CONDUCT AS PER THE RULES
◦ THE ACCOUNTS SHALL GIVE A TRUE AND FAIR VIEW
◦ SHALL HAVE ACCESS TO ALL RECORDS AND VOUCHERS
INITIAL PUBLIC OFFERING
 MUST BE REGISTERED WITH SEBI
 MUST HAVE ASSETS WORTH RS.500

CRORES
 MINIMUM NUMBER OF HOLDERS FORMING

PART OF PUBLIC SHALL BE 200

 OFFER SIZE IS FOR Rs.250 CRORES
 NOT LESS THAN 25% OF THE TOTAL
OUTSTANDING UNITS IS OFFERED TO THE
PUBLIC
 FURTHER ISSUANCES BY WAY OF AN FPO OR

RIGHTS OR PREFERENTIAL OR QIP OR

BONUS
OFFER PROCESS
 LIKE AN IPO
 VALIDITYOF OBSERVATION IS ONE YEAR
 ALLOT SHARES TO BOTH RESIDENT AND NON
RESIDENT INDIANS
 SUBSCRIPTION AMOUNT OF NOT LESS THAN Rs.2
LAC RUPEES
 PERIOD OF SUBSCRITION – NOT MORE THAN 30
DAYS
 PROPORTIONATE ALLOTMENT IN CASE OF OVER
SUBSCRIPTION
 PRICE DETERMINED BY BOOK BUILDING
 REFUND WITHIN 12 DAYS OF CLOSURE
 ALLOTMENT ONLY IN DEMAT FORM
 REFUND IF NOT COLLECTING 90% OF THE ISSUE
SIZE AND NUMBER OF PUBLIC SHAREHOLDERS
LESS THAN 200
 OVERSUBSCRIPTION – 25% OF THE ISSUE SIZE
 FOR GENERAL PURPOSES – NOT MORE THAN 10%
OF THE ISSUE SIZE
 MUST MAKE AN IPO WITHIN 3 YEARS OF
REGISTRATION
 LISTING
◦ MUST BE LISTED ON THE EXCHANGE AND TRADING LOT
SHALL BE ONE LAKH
DELISTING
 PUBLIC HOLDING FALLS BELOW 25%
 NO FURTHER PROJECTS TO INVEST IN
 SEBI OR THE EXCHANGE DIRECT THE

DELISTING OF THE REIT

 TO PROVIDE AN EXIT OPTION TO THE UNIT

HOLDERS
 SHALL SURRENDER ITS CERTIFICATE IF

DELISTED
INVESTMENT CONDITIONS
 ONLY IN HOLDCO AND OR SPVs OR PROPERTIES OR
SECURITIES OR TDR IN INDIA
 NOT INVEST IN VACANT LAND OR AGRICULTURAL
LAND OR MORTGAGES OTHER THAN MORTGAGE
BACKED SECURITIES
 IN PROPERTIES THROUGH SPV
◦ NO OTHER SHAREHOLDER SHALL PRVENT THE REIT FROM
FOLLOWING THESE REGULATIONS
◦ SHALL APPOINT MAJORITY OF THE BOARD OF THE SPV
◦ VOTING RIGHTS OF THE REIT EXCERCISED IN ALL MEETINGS
 IN PROPERTIES THROUGH HOLDCO
 SAME AS ABOVE AND ULTIMATE HOLDING INTEREST OF THE
REIT IN THE SPV IS NOT LESS THAN 26%
 80% OF THE ASSETS SHALL BE INVESTED IN RENT
GENERATING ASSETS
 NOT MORE THAN 20% IN UNDER CONSTRUCTION
PROJECTS OR DEBT SECURITIES OF REAL ESTATE
COMPANIES OR EQUITY SHARES OF LISTED
COMPANIES, GOVERNMENT SECURITIES, UNUTILISED
FSI OF A PROJECT WHERE IT HAS MADE INVESTMENT
OR MONEY MARKET INSTRUMENTS
 51% OF THE REVENUE FROM RENTS, LEASE RENTALS
ETC
 75% OF THE VALUE OF THE REIT ASSETS SHALL BE
RENT GENERATING
 REIT SHALL HOLD ATLEAST TWO PROJECTS AT A TIME
 SHALL HOLD COMPLETED PROJECTS FOR
ATLEAST 3 YEARS
 SALE OF ANY ASSET – WORTH MORE THAN

10% OF THE ASSETS OF THE REIT –

APPROVAL OF UNIT HOLDERS
 SHALL NOT INVEST IN ANY OTHER REIT
 SHALL NOT ENGAGE IN LENDING
 RELATED PARTY
TRANSACTIONS
 ALL RELATED PARTY TRANSACTIONS SHALL
BE AT ARMS LENGTH BASIS IN ACCORDANCE
WITH THE PROVISIONS OF THE COMPANIES
ACT
 SHALL BE DISCLOSED TO THE STOCK

EXCHANGE
 TWO VALUATION REPORTS FROM TWO

DIFFERENT VALUERS SHALL BE OBTAINED

 SUBJECT TO PRICE RESTRICTIONS
 IF RPT IS BEFORE INITIAL OFFER
◦ ADEQUATE DISCLOSRUES TO THAT EFFECT IN THE OFFER
DOCUMENT
 IT THE RPT IS AFTER THE INITIAL OFFER
◦ DISCLOSE TO THE STOCK EXCHANGE
◦ VLAUE IN A FINANICAL YEAR PERTAINING TO
ACQUISITION OR SALE EXCEEDS 10% OF THE VALUE OF
THE RIET OR THE VLUE OF FUNDS BEING BORROWED IN
A FINANCIAL YEAR EXCEEDS 10% OF THE TOTAL
CONSOLIDATED BORROWINGS OF THE REIT , HOLDCO
AND / OR SPV, APPROVAL FROM UNIT HOLDERS PRIOR
TO ENTERING INTO SUCH TRANSACTION
◦ SHALL BE ACCOMPANIED BY A TRANSACTION DOCUMENT
BORROWINGS
 NOT EXCEED 49% OF THE VALUE OF THE
ASSETS
 IF THE BORROWINGS EXCEED 25%

◦ CREDIT RATING
◦ APPROVAL OF THE UNIT HOLDERS
VALUATION OF ASSETS
 SHALL NOT BE AN ASSOCIATE OF THE
SPOSNSOR OR MANAGER OR TRUSTEE
 FULL VALUATION TO BE CONDUCTED AT LEAST
ONCE IN EVERY FINANCIAL YEAR, WITHIN 3
MONTHS OF MARCH 31
 THIS IS A DETAILED VALUATION OF ALL ASSETS
 HALF YEARLY VALUATION SHALL BE CONDUCTED
FOR THE HALF YEAR ENDING SEPT 30
 THE MANAGER SHALL SUBMIT THE VALUATION
REPORT WITHIN 15 DAYS TO THE STOCK
EXCHANGE AND TO THE UNIT HOLDERS
RIGHTS OF UNIT HOLDERS
 RIGHT TO RECEIVE INCOME
 RIGHT TO ATTEND MEETINGS AND VOTE

◦ IN PERSON, BY POSTAL BALLOT, ELECTRONIC

MODE
◦ 21 DAYS NOTICE IN WRITING OR ELECTRONIC
◦ VOTING BY RELATED PARTIES NOT CONSIDERED
IN CERTAIN ISSUES
 ANNUAL MEETING ONCE A YEAR
◦ WITHIN 120 DAYS OF THE END OF THE FINANICAL
YEAR. GAP OF NOT MORE THAN 15 MONTHS
BETWEEN TWO MEETINGS
 CERTAIN SPECIAL ISSUES LIKE ANY ISSUER
AFTER IPO, BORROING IN EXCESS
◦ VOTES CAST IN FAVOUR MUST BE MORE THAN
VOTES CAST AGAINST
 FOR MATTERS INVOLVING CHANGE IN
AMNAGER, MATERIAL CHANGE IN
INVESTMENT STRATEGY, SEEKING
DELISTING OF THE REIT, ANY ISSUE NOT IN
THE ORDINARY COURSE OF BUSINESS
◦ VOTES CAST IN FAVOUR SHALL BE ONE AND HALF
TIMES THE VOTES CAST AGAINST
 IN CASE UNIT HOLDERS WANT TO REMOVE THE
MANAGER, AUDITOR, VALUER OR FEEL THAT THE
AFFAIRS ARE DETRIMENTAL TO THE INTEREST OF
THE UNIT HOLDER
◦ 25% OF THE UNIT HOLDERS BY VALUE SHALL APPLY IN
WRITING TO THE TRUSTEE AND THE MATTER SHALL BE
VOTED ON
 IN CASE OF CHANGE OF TRUSTEE, NOT LESS THAN
60% OF THE UNIT HOLDERS SHALL APPLY TO THE
MANAGER
 IN CASE OF CHANGE IN SPONSOR
◦ APPROVAL FROM THE UNIT HOLDERS
◦ PROVIDE DISSENTING UNIT HOLDERS EXIT OPTIONS
MAINTENANCE OF
RECORDS
 MANAGER SHALL MAINTAIN FOR SEVEN YEARS
◦ DETAILS OF INVESTMENTS MADE
◦ INSURANCE POLICES
◦ INVESTMENT MANAGEMENT AGREEMENT
◦ DOCUMENTS PERTAINING TO ISSUE AND LISTING
◦ DISTRIBUTIONS
◦ BOOKS OF ACCOUNTS AND FINANCIAL STATEMENTS
◦ REPORTS
◦ AUDIT REPORTS
 TRUSTEE SHALL MAINTAIN CERTIFICATE OF
REGISTRATION, TITLE DEEDS, TRUST DEED,
APPLICATION MADE, NOTICES, AGENDA, MINUTES
PERIODICAL REPORTS
 INFRASTRUCTURE INVESTMENT TRUST
REGULATIONS, 2014
DEFINITIONS
 COMPLETED AND REVENUE GENERATING PROJECT
MEANS AN INFRASTRUCTURE PROJECT, WHICH
PRIOR TO THE DATE OF ITS ACQUISITION BY, OR
TRANSFER TO, THE INVIT, SATISFIES THE
FOLLOWING CONDITIONS,–
◦ (I) THE INFRASTRUCTURE PROJECT HAS ACHIEVED THE
COMMERCIAL OPERATIONS
◦ (II) THE INFRASTRUCTURE PROJECT HAS RECEIVED ALL
THE REQUISITE APPROVALS AND CERTIFICATIONS FOR
COMMENCING OPERATIONS; AND
◦ (III) THE INFRASTRUCTURE PROJECT HAS BEEN
GENERATING REVENUE FROM OPERATIONS FOR A
PERIOD OF NOT LESS THAN ONE YEAR
 CONCESSION AGREEMENT
◦ AN AGREEMENT ENTERED INTO WITH A
CONCESSION AUTHORITY FOR THE
IMPLEMENTATION OF THE PROJECT
 PPP
◦ PROJECT BUILT ON PUBLIC PRIVATE PARTERSHIP
DIFFERENCES WITH REIT

 OF THE SPONSOR
◦ EACH SPONSOR SHALL HAVE A NETWORTH OF
Rs.100 CRORES
◦ ALL SPONSORS COLLECTIVELY SHALL HOLD A
MINIMUM OF 15% OF THE TOTAL UNITS OF THE
INvIT, WHICH SHALL NOT BE TRANSFERABLE FOR A
PERIOD OF 3 YEARS AFTER INITIAL OFFER SUBJECT
TO THE CONDITION THAT THE SPONSOR SHALL BE
REPSONSIBLE FOR ALL ACTS OF OMMISSION AND
COMMISION OF THE INvIT. HOLD MININIMUM OF
25% IF NOT SUBJECT TO THIS CONDITION
 LISTNG AND TRADING
◦ TRADING LOT MUST BE ATLEAST ONE CRORE
 INVESTMENT CONDITIONS
◦ THE INVESTMENT BY AN INVIT SHALL ONLY BE
IN HOLDCO AND/ OR SPVS OR
INFRASTRUCTURE PROJECTS OR
SECURITIES IN INDIA
◦ IN CASE OF Public Private Partnership
PROJECTS, THE INVIT SHALL MANDATORILY
INVEST IN THE INFRASTRUCTURE PROJECTS
THROUGH HOLDCO AND/ OR SPV.