Manner & mechanism of providing exit option under SEBI InvIT Regulations

Manner & mechanism of providing exit option under SEBI InvIT Regulations

SECURITIES & EXCHANGE BOARD OF INDIA

CIRCULAR

SEBI/HO/DDHS/DDHS/CIR/P/2020/122

July 17, 2020

To,
All Infrastructure Investment Trusts (“InvITs”)
All Parties to InvITs
All Recognised Stock Exchanges
All Merchant Bankers

Dear Sir/ Madam,

Sub: Manner and mechanism of providing exit option to dissenting unit holders pursuant to Regulation 22(5C) and Regulation 22(7) of SEBI Infrastructure Investment Trusts Regulations, 2014 (“SEBI (InvIT) Regulations”)

1. Regulation 22 (5C) and Regulation 22 (7) of SEBI (InvIT) Regulations provide for exit option to be given to dissenting unit holders.

2. This circular details the guidelines in respect of conditions, manner and mechanism of exit option to be provided to dissenting unit holders. The detailed guidelines have been provided in Annexure -I.

3. An acquirer providing exit option to dissenting unit holders in terms of this circular shall appoint one or more merchant bankers, registered with the Board, as lead manager(s) for the exit option/offer, who shall ensure compliance with the provisions of SEBI (InvIT) Regulations and this circular. Lead manager(s) shall send the Letter of Offer (LoF) to all dissenting unit holders and shall also file the same along with the due diligence certificate, in line with format specified in Form A in Annexure-I of SEBI circular no. CIR/IMD/DF/55/2016 dated May 11, 2016, with the Exchange(s). The broad contents of LoF are indicated in Annexure-II of this circular.

4. Upon completion of exit option process, a due diligence certificate inline with format specified in the Form D in Annexure-I of SEBI circular no. CIR/IMD/DF/55/2016 dated May 11, 2016, shall be filed by the lead manager(s) with the Board within two working days of payment of consideration by the acquirer.

5. This circular is being issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 33 of the SEBI (InvIT) Regulations.

6. This circular is available on the website of the Securities and Exchange Board of India at www.sebi.gov.in under the sub-category “Circulars” under the category “Legal”.

Yours faithfully,

Richa G. Agarwal
Deputy General Manager
Department of Debt and Hybrid Securities
Email id: richag@sebi.gov.in
Phone: +91-22-26449596

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