SEBI Introduces Updated Disclosure Requirements for REIT and InvIT

SEBI has recently introduced the new disclosure guidelines for Real Estate Investment Trusts and Infrastructure Investment Trusts. This includes the revision of financial information in post-listing disclosures and offer documents.

As per the new rules, REIT and InvIT are now required to share audited financial statements of the last three financial years and a stub period, if any.

SEBI stated that if the company’s recent audited financials are older than six months from the date of filing, it must give updated financials for the stub period. For follow-on offers, where the company has not existed for three years, it must share details for the period it has existed, along with the stub period.

In case of the first-time offers, REITs and InvITs must include combined audited financial statements in the placement memorandum or offer document. SEBI also stated some extra disclosure requirements that will be added in audited financial detail and shall also be audited by the auditors. These details include cash flow from each project, any contingent liabilities, and commitments as of the latest financials date. Only peer reviewed auditors who are approved under the REIT and InvIT regulations can audit the financial details of the company.

SEBI said that these new rules will be effective right away, except for the requirement stated in Chapter 4. Those will apply to financial information for periods starting on or after April 1, 2025.

REITs and InvITs must submit their financial results every quarter and year-to-end financial results within 45 days after each quarter ends, except for the last quarter to the stock exchanges. They must also submit their annual financial results within 60 days of the financial year-end. The results for the final quarter must match the annual audited numbers and what was reported up to the third quarter.

REITs and InvITs now have stricter rules for disclosing unit holding patterns. They must share this information one day before listing, each quarter within 21 days, and within 10 days of capital restructuring resulting to a change above 2% in the total outstanding units. SEBI has also designed a Working Group to review the rules that REITs and InvITs are required to follow. This group formed under the guidance of Hybrid Securities and Advisory Committee (HySAC). Based on the Working group’s report, SEBI has now issued updated guidelines.

SEBI Circular