SEBI Tightens Disclosure Norms for REITs and InvITs

The Securities and Exchange Board of India (SEBI) has introduced new disclosure requirements for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This decision, announced on Wednesday, involves the enhancement of norms related to financial information in offer documents and post-listing disclosures.

Under the revised guidelines, REITs and InvITs issuing offer documents or follow-on offers are now required to disclose audited financial statements for the last three fiscal years, along with a stub period if relevant. If the latest audited financials are more than six months old at the time of filing, additional stub period financials must be provided. In the event of follow-on offers by recently formed entities, disclosures must include the period since inception plus the stub period.

The revised regulation also demands that audited combined financial statements for initial offers be disclosed in offer documents. Additional disclosures, such as project-wise operating cash flows and contingent liabilities, will be subjected to audit. These stringent rules, effective immediately except for specific sections applicable from April 1, 2025, are part of SEBI's effort to ensure greater transparency and compliance within the sector.

(With inputs from agencies.)