Market regulator Sebi in its board meet made changes to the debt market rules. Infra InvIT and REIT norms were amended as well. With regard to the debt market rules, issuers other than unlisted REITs/InvITs that are less than three years old could tap into the debt markets. The issues must be privately placed via Electronic Debt Bidding platform (EBP) with QIB participation. This move is likely to facilitate fundraise by infra SPVs, REITs, and InvITs. The minimum holding of unit holders other than sponsor is set at 25 percent. For REIT, the minimum application value will be Rs 10,000-15,000 (from 50,000). Moreover, revised trading lot shall be one unit.

Harsh Shah, CEO, India Grid, is of the view that the new Sebi norms would certainly help liquidity, which is an important aspect to make any capital market vehicle or platform work. “This would enable a far broader participation for retail investors and would eventually increase liquidity and would give confidence to both domestic institutional investors as well as global institutional investors,” said Shah in an interview with CNBC-TV18.

He further added, “We wholeheartedly welcome this. It will certainly be a big change in bringing liquidity into these platforms.”

On debt market rules, he said, it was just a clarification that was issued. The company has been raising debt and has so far raised Rs 13,000 crore of debt, including one public market issue. “There were certain confusions with respect to regulations of InvITs that do not have a track record of three years, on whether they can issue debt securities, some new REITs faced an issue on account of technicality, so this clarification from Sebi makes it smoother for them to raise debt,” Shah clarified.

Talking about how they have evolved, Shah said in 2017 when they listed, they had no investment from insurance companies and pension funds and there was very little retail participation but today they have over 10 insurance companies that own about 10 percent of the company or the platform. “We have also several large employee pension funds that are owners of our platform and the retail participation in terms of crores has gone up 4 times from Rs 400 crore to Rs 1600-1700 crore,” he added.

“In the last four years, InvITs and REITs put together have over Rs 2 lakh crore of assets under management. This, by far, is the biggest success of the Ministry of Finance, Sebi, and the RBI in making a new financial structure for infrastructure finance and making it a huge success,” said Shah.

For the entire interview, watch the video.

(Edited by : Dipika)