Capital markets regulator Sebi allowed emerging investment vehicles REITs and InvITs to issue commercial papers subject to certain conditions, according to SEBI.
The move came after Reserve Bank Commercial Paper Directions last month indicated that InvITs and REIT having a net worth of at least Rs 100 crore are eligible to issue commercial paper. The capital market regulator said that the REITs and IncITs may issue listed commercial papers. This is subject to certain conditions according to SEBI.
The move came after Reserve Bank Commercial Paper Directions indicated that InvITs and REIT having a net worth of at least Rs 100 crore are eligible to issue commercial paper.
The capital markets regulator said that REITs and InvITs may issue listed commercial papers. This is subject to certain conditions, including, REITs and InvITs need to abide by the guidelines prescribed by RBI for issuances of commercial papers and follow the conditions of listing norms prescribed by Sebi.
The issuance of listed CPs should be within the overall debt limit permitted under the REITs and InvITs rules. Commercial paper or CP in market parlance refers to the short-term debt instrument issued by companies to garner funds for a time period of up to one year.
REITs and InvITs are relatively new instruments in the Indian context but are extremely popular in global markets. While a REIT comprises a portfolio of commercial real assets, a major portion of which is already leased out, InvITs comprise the portfolio of infrastructure assets such as highways and power transmission.
