Economy

IFSC regulator opens doors for REITs, InVITs listing in GIFT City

KR Srivats New Delhi | Updated on October 24, 2020

Representative image   -  iStock

Close on the heels of SEBI approving listing of REITs and InVITs in stock exchanges in international financial services centres (IFSCs), the IFSCA — the regulator for economic activity in IFSCs — has now come up with a broad “regulatory framework” for listing of these new age instruments in IFSCs.

The detailed requirements for listing and trading of REITs in IFSC would be prescribed by the recognised stock exchanges in IFSC after approval by IFSCA chaired by Injeti Srinivas, former Secretary, Ministry of Corporate Affairs. Similarly, these exchanges will have to issue detailed framework for listing of InvITs in IFSC, after obtaining approval of the regulator IFSCA.

REIT in IFSC

Any person or entity from India (IFSC or outside IFSC) or a foreign jurisdiction seeking to operate as a REIT in IFSC will have to obtain registration from IFSCA (International Financial Services Centre Authority) and get listed on a recognised bourse. The concept of secondary listing of REIT has also been permitted.

InvIT in IFSC

Infrastructure Investment Trusts (InvITs) have to get registration from IFSCA. They have been permitted to raise funds through public issue with units listed on a recognised stock exchange in IFSC; or private placement with units listed on a recognised stock exchange in IFSC; or private placement whose units are not proposed to be listed on any recognised stock exchange.

Experts’ take

Nikhil Kamath, Co-Founder and CIO, True Beacon and Zerodha, said, “The listing of REITs and InvIT on the IFSC stock exchange in GIFT city not only opens up the playing field for it be on par with global IFSCs but also allows the entities on the IFSC exchange to benefit from the growth of infrastructure and real estate across international jurisdictions”.

This initiative puts India on the similar platform as the major financial capitals of the world including, Tokyo, UK and New York, he said.

One way to look at it is how India is finally breaking out of its shell towards becoming a developed super power by indicating moves ordinarily made by more mature markets unlike the India's young globalization heritage, Kamath said.

Bhairav Dalal, Partner & Real Estate Tax Leader, PwC India, said: “Indian REITs/InvITs are now an integral part of the capital market ecosystem and with multiple successful fund raises, India has now established itself as a successful REIT/InvIT market.

“Inviting Globally established REITs and InvITs to list themselves in IFSC is an excellent next step and this will further enhance our capital markets”

Published on October 24, 2020

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