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TMI BlogGuidelines for public issue of units of InvITsX X X X Extracts X X X X X X X X Extracts X X X X ..... available on SEBI website at www.sebi.gov.in under the categories "Legal Framework" and under the drop down "Circulars". Yours faithfully, Richa G. Agarwal Deputy General Manager Investment Management Department Tel No.022-2644 9596 Email id - [email protected] Schedule-A Guidelines for public issue of units of InvITs 1. Appointment and obligations of merchant banker and others: (1) The Investment Manager on behalf of the InvIT, in line with Regulation 10 (5) of InvIT Regulations, shall appoint one or more merchant bankers, at least one of whom shall be a lead merchant banker and shall also appoint other intermediaries, in consultation with the lead merchant banker, to carry out the obligations relating to the issue. (2) Where the issue is managed by more than one merchant banker, the rights, obligations and responsibilities, relating inter alia to disclosures, allotment, refund and underwriting obligations, if any, of each merchant banker shall be predetermined and disclosed in the offer document. 2. Filing of offer document (1) Draft offer document, offer document and final offer document shall mean as under: a. Draft offer document refers to the draft of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s; (7) The lead merchant banker shall submit the following documents to the Board along with the offer document: (a) a statement certifying that all changes, suggestions and observations made by the Board have been incorporated in the offer document; (b) a due diligence certificate as per Form B of Annexure I (8) If changes are made in the draft offer document or offer document with respect to any of the following, the lead merchant banker shall file fresh draft offer document with the Board highlighting all changes made in the draft offer document or offer document, as applicable, along with the fees as specified in InvIT Regulations: (a) Change in sponsor(s)/ Investment Manager or persons in control of the sponsor(s)/ Investment Manager. (b) Change in more than half of the board of directors of the Investment Manager. (c) Change in any object(s) of the issue contributing/amounting to more than 20% of the issue size. (d) Any increase or decrease in estimated issue size by more than twenty five per cent. (9) All other changes/ updations in the draft offer document or offer document which are not covered under clause (8) above shall be carried out by the lead merchant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or(s), investment manager and merchant banker(s) before opening of the issue. (g) There shall be a lock-in of 30 days on the units allotted to the Anchor Investor from the date of allotment in the public issue. Provided that the lock-in for strategic investors shall be one year from the date of allotment in the public issue. (h) Neither the merchant bankers nor any person related to the merchant bankers in the concerned public issue can apply under Anchor Investor category except Mutual Funds, Insurance Companies and Pension Funds. (i) The parameters for selection of Anchor Investor shall be clearly identified by the merchant banker. 4. Application and Abridged version of the offer document. (1) The application form and the abridged version of the offer document as stated in Regulation 14(4)(n) of the InvIT Regulations for the issue shall be prepared by the lead merchant banker. (2) The lead merchant banker shall make arrangements for distribution of the application form along with a copy of the abridged version of the offer document. (3) The abridged version of the offer document shall contain the disclosures as specified in Annexure III and shall not contain any matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he investment manager on behalf of the InvIT shall announce the floor price or price band at least five working days before the opening of the bid (in case of an initial public offer) on the website of the sponsor, investment manager and stock exchanges and in all the newspapers in which the pre issue advertisement was released and website of InvIT, if applicable. (4) The announcement referred to in clause 8(3) above shall contain relevant financial ratios computed for both upper and lower end of the price band and also a statement drawing attention of the investors to the section titled "basis of issue price" in the final offer document. (5) The floor price or price band and the relevant financial ratios referred to in clause 8(4) shall be disclosed on the websites of those stock exchanges where the units are proposed to be listed. (6) The floor price or price band shall be pre-filled in the application forms available on the websites of the stock exchanges. (7) The Investment manager on behalf of the InvIT Investment manager on behalf of the InvIT shall, in consultation with lead book runner, determine the issue price based on the bids received. (8) Once the final price (cut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia giving category-wise details of bids received, for a period of atleast three days after closure of bids. 10. Allotment procedure and basis of allotment. (1) On receipt of the sum payable on application, the investment manager on behalf of the InvIT shall allot the units to the applicants. (2) The allotment of units to applicants other than anchor investors shall be on proportionate basis within the specified investor categories and the number of units allotted shall be rounded off to the nearest integer, subject to minimum allotment as per InvIT Regulations. (3) In case of under-subscription in any investor category, the unsubscribed portion in either of the category specified in clause 3 (1) may be allotted to applicants in the other category. (4) The authorized representatives of the designated stock exchange along with the post issue lead merchant bankers and registrars to the issue shall ensure that the basis of allotment is finalized in a fair and proper manner. 11. Maintenance of books and records (1) A final book of demand showing the result of the allocation process shall be maintained by the lead book runner. (2) The book runner/s and other intermediaries asso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in full and disclose all relevant facts and not be restricted to select extracts relating to that information. (d) it shall be set forth in a clear, concise and understandable language. (e) it shall not include any issue slogans or brand names for the issue except the normal commercial name of the sponsor/investment manager. (f) it shall not use extensive technical, legal terminology or complex language and excessive details which may distract the investor. (g) it shall not display models, celebrities, fictional characters, landmarks or caricatures or the likes. (h) no issue advertisement shall appear in the form of crawlers (the advertisements which run simultaneously with the programme in a narrow strip at the bottom of the television screen) on television. (i) in any issue advertisement on television screen, the risk factors shall not be scrolled on the television screen and the advertisement shall advise the viewers to refer to the red herring prospectus or other offer document for details. (j) it shall not contain slogans, expletives or non-factual and unsubstantiated titles. (k) if it contains highlights, it shall also contain risk factors with equal importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red into by the InvIT with the stock exchange and listing/ trading permission is obtained. 15. General conditions: (1) Restrictions on issue: No InvIT shall make a public issue of units, if the InvIT or parties to the InvIT or the promoter(s) or director(s) of parties to the InvIT: (a) is debarred from accessing the securities market by the Board; (b) is a promoter, director or person in control of any other company or a sponsor, investment manager or trustee of any other InvIT or InvIT which is debarred from accessing the capital market under any order or directions made by the Board; (c) is in the list of the willful defaulters published by the Reserve Bank of India. (2) Alteration of rights of holders of units. No InvIT shall alter the terms (including the terms of issue) of units which may adversely affect the interests of the holders of that units unless a resolution to that effect is passed at a meeting of the unitholders in accordance with Regulation 22(5) of InvIT Regulations. (3) Prohibition on payment of incentives. No person connected with the issue, including a person connected with the distribution of the issue, shall offer any incentive, whether direct or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfied that: (1) the requirement is procedural in nature; or (2) any disclosure requirement is not relevant for a particular sector/sub-sector or InvIT; or (3) the non-compliance was caused due to factors beyond the control of the InvIT. (4) any provision of Act(s), Rule(s), regulation(s) under which the InvIT is established or is governed by, is required to be given precedence to; or (5) the requirement may cause undue hardship to investors. ANNEXURE I FORMATS OF DUE DILIGENCE CERTIFICATES FORM A FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY MERCHANT BANKER ALONG WITH DRAFT OFFER DOCUMENT To, Securities and Exchange Board of India Dear Sirs, Sub.: Public Issue of ………………… by………………………. (Name of the InvIT) We, the lead merchant banker(s) to the above mentioned forthcoming issue, state and confirm as follows: (1) We have examined various documents including those relating to litigation like commercial disputes, patent disputes, disputes with collaborators, etc. and other material in connection with the finalization of the offer document pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there shall be only one denomination for the units of the InvIT and (b) An undertaking from the Investment manager on behalf of the InvIT that it shall comply with such disclosure and accounting norms specified by the Board from time to time. (9) We enclose a note explaining how the process of due diligence has been exercised by us with respect to the nature of the assets, the risk factors, net worth and experience of the sponsor/investment manager, experience of the key personnel, etc. (10) We enclose a checklist confirming regulation-wise compliance with the applicable provisions of the InvIT Regulations, containing details such as the regulation number, its text, the status of compliance, page number of the draft offer document where the regulation has been complied with and our comments, if any. (11) We enclose a checklist confirming clause-wise compliance with the guidelines for public offer issued under the InvIT Regulations. (12) We certify that profits from related party transactions have arisen from legitimate business transactions. Merchant Banker(s) to the Issue with Official Seal(s) Place : Date : FORM B FORMAT OF DUE DILIGENCE CERTIFICATE TO BE GIVEN BY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip;……………… (Name of InvIT) We, the under noted post issue lead merchant bankers to the abovementioned issue state as follows: (1) We confirm that - (a) for the units offered for lock-in, non-transferability details have been informed to the depositories; (b) details of lock-in have been provided to all the stock exchanges on which units are to be listed, before the listing of the units. (2) We certify that units included as minimum sponsors' contribution and the units in excess of minimum sponsors' contribution have been locked-in in terms of Regulation 12 of the InvIT Regulations. (3) We certify that provisions regarding lock-in of units held by persons other than sponsors have been duly complied with in accordance with InvIT Regulations. Merchant Banker(s) to the Issue with Official Seal(s) Place : Date : ANNEXURE II FORMATS OF POST ISSUE REPORTS PART A FORMAT OF INITIAL POST ISSUE REPORT FOR PUBLIC ISSUE Subscription Status: (Subscribed/ Undersubscribed) Note: It is the responsibility of lead merchant banker to give correct information after verifying it from the Investment Manager and the registrar to the issue. (1) Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest paid for delayed period, if so, for which period : (12) Amount of refund due : Rs. (13) Refund Banker(s) (Name and Address): (14) Date of transfer of refund amount to Refund Banker, if any : (15) Name of Designated Stock Exchange : (16) Names of other stock exchanges where listing is sought : (17) Date on which application was filed with each stock exchange for listing of units : (18) Date when listing and trading permission given by each stock exchange (Enclose copies of permission letters of stock exchanges) : (19) Reasons for delay in listing of units for trading, if any : (II) IN CASE OF UNDER SUBSCRIBED ISSUE: (1) If the issue is underwritten, mention the amount of issue underwritten : (2) Extent of under subscription on the date of closure of the issue (a) Percentage : (b) Amount : (3) Total no. of underwriters : (4) If devolvement notices had not been issued, mention how the shortfall was met : (5) No. of underwriters to whom devolvement notices had been issued : (6) Date of issue of devolvement notices : (7) No. of underwriters who did not pay devolvement (Please give names, amount underwritten and reasons for not paying) : (8) In case of defaul ..... 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