SEBI has changed the rules of Disclosure of REIT and INVIT. This has increased the attraction of both of them for investment. Experts say that due to the change in the rules of the disclosure, investors will get complete information about the cash flow of these two. They will be able to assess the risk and returns according to the projects. SEBI issued two circulars in this regard on 7 May.
Have to disclose for every SPV
Kinjal Champneria, partner of Solomon & Co, said, “SEBI’s revised circular attempts to fix the standard of financial disclosure in the offer documents of Reits and Invits. It contains Pro Forma of Financial Statements for Material Acquisition or Diversity.” He said that now such trusts will have to disclose for every special purpose vehicle (SPV) and holding company (Holdco).
Disclosure rules like international standards
It is estimated that the change in the rules of the disclosure will increase investors’ interest in reit and invits. Champneria said that the new framework has been according to international standards in India. This will also help in promoting Ease of Doing Business. This will make it easier to raise funds and give disclosure.
Also guidelines for classification of assets
Champneria said that the changes made by SEBI will increase the confidence of investors regarding writ and invites. The new disclosure rules mention how the classification of assets owned by reits will be.
Also read: Digital Form 16: If you know about digital form 16, you will be able to file ITR yourself
Invits and reits mean
Earlier, the working group formed for RIETS and Invits submitted its report earlier this year. Reits mean Real Estate Investment Trust. Invits mean Infrastructure Investment Trust. Both of these are investment vehicles. These give investors opportunities to bet on real estate and infrastructure assets. The focus of reits is on commercial buildings such as real estate, while the infrastructure of Invits is on assets. This includes highways, airports and pall plants.