Real Estate Investment Trusts (REITs):
- They are like mutual funds in the stock market in the field of real estate sector.
- Working: REITS sells units to investors. This money is invested in real estate projects to earn rental income. This income is then distributed to unit holders and the units are listed and traded on stock markets like any other equity share.
Infrastructure Investment Trusts (InvITs):
- It is a modified REITS type structure for infrastructure projects.
- It will attract long term finance from foreign and domestic sources including the NRIs
- An InvIT would be a trust with parties such as sponsor, investment manager, trustee and project manager.
Recent amendments in guidelines:
- Now, REITs and InvITs can accept only Applications Supported by Blocked Amount (ASBA).
- The manager on behalf of the REIT or InvIT will announce the floor price or price band at least two working days prior to the opening of the bid in case of an initial public offer. Currently, it is five days.
- The trusts may extend the bidding issue period for a minimum of three working days in case of force majeure, banking strike or similar circumstances. However, the extension should not exceed the 30-day bidding period.
- The amendments have been made to rationalise and ease the process of public issue of units of REITs and InvITs.
