Draft Circular; dated: 01.07.2025
The Securities and Exchange Board of India (SEBI) has proposed significant changes aimed at easing the conversion process of private listed Infrastructure Investment Trusts (InvITs) into public InvITs, thereby facilitating broader investor participation and enhancing regulatory clarity.
1. Proposed Removal of Lock-In Requirements
SEBI has proposed removal of lock-in restrictions in the following two cases upon conversion:
- Minimum Sponsor Contribution – The lock-in requirement currently applicable on the minimum sponsor contribution may be waived upon conversion into a public InvIT.
- Sponsor’s Units Over and Above Minimum Contribution – The lock-in on units held by the sponsor in excess of the minimum contribution may also be removed, further enhancing liquidity and flexibility for sponsors.
This move is expected to reduce entry barriers, provide sponsors with more operational freedom, and make the InvIT structure more attractive to institutional investors and fund managers.
2. Alignment with Follow-On Public Offer (FPO) Norms
In addition to the lock-in relaxation, SEBI has proposed that the procedure and disclosure requirements applicable to a follow-on public offer (FPO) will also be made applicable to the public offer of units during the conversion of a private InvIT to a public InvIT.
This ensures a uniform regulatory framework and aligns such conversions with established capital market practices, thereby enhancing transparency and investor confidence.
3. Public Consultation Open Until July 22, 2025
SEBI has invited public comments on these proposals. Stakeholders, including investors, sponsors, and market intermediaries, can submit their feedback by July 22, 2025.
4. Implications of the Proposal
If implemented, the proposals could:
- Simplify the transition process for private InvITs seeking public listing
- Encourage more private InvITs to opt for public market participation
- Enhance investor protections through greater disclosure and standardised procedures
Click Here To Read The Full Circular
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