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<keyword id="24068881" type="General" weightage="100" keywordseo="Equity-investments-in-Indian-real-estate" source="keywords">Equity investments in Indian real estate</keyword> may rise 49% to $11 billion this calendar year amid strong demand for properties, according to CII and CBRE. In the 2023 calendar year, the equity investments in real estate stood at $7.4 billion. Industry body CII and real estate consultant CBRE on Wednesday released a joint report titled 'Leading the Charge: Crafting the Skylines of Tomorrow' at the annual CII Realty 2024 conclave. Equity capital inflows touched $8.9 billion between January and September, registering a 46% year-on-year growth. "Overall equity investments in 2024 in the real estate sector are set to hit a new record surpassing $10 billion for the first time," the report said. With a resurgence in investment inflows in built-up office assets and a strong acquisition pipeline for land in the residential sector, the overall equity investments in 2024 would be in the $10-11 billion range. During January-September, institutional and collective vehicle investors accounted for nearly 40% of the overall investments. Developer companies led the total capital inflows with more than 41% share in this period. Domestic investors (predominantly developers) invested nearly USD 6 billion during the first nine months of the calendar year, dominating the overall capital inflows with an almost 65% share. In comparison, foreign investors contributed about $3.1 billion during the same timeframe. Notably, North American and Singaporean investors were the significant contributors, representing about 85% of all foreign capital inflows. Anshuman Magazine, Chairman &amp; CEO, India, South-East Asia, Middle East &amp; Africa, CBRE, said, "Projection for 2024 equity investments between $10-11 billion, highest-ever, underscores continued investor interest in the growing <keyword id="23870227" type="General" weightage="20" keywordseo="real-estate-market-in-India" source="keywords">real estate market in India</keyword>." With SEBI's SM-REIT framework, he said, smaller but high-quality assets in Tier-II markets would also present new avenues for strategic capital deployment. "We believe this regulatory support will add much-needed transparency, enabling a more diversified investment base and encouraging institutional participation across these markets," Magazine said. Going ahead, he said this growing diversification will not only solidify India's real estate sector but also pave the way for future growth across emerging asset classes.

Equity investments in Indian real estate may rise 49% to record $11 billion this year, says CII-CBRE report

New Delhi: Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords">Sebi</keyword> has proposed allowing Real Estate Investment Trusts (<keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword>), Small and Medium REITs (SM REITs) and Infrastructure Investment Trusts (<keyword id="20186403" type="General" weightage="20" keywordseo="InvITs" source="keywords">InvITs</keyword>) to use <keyword id="21737868" type="General" weightage="20" keywordseo="interest-rate-derivatives" source="keywords">interest rate derivatives</keyword> for <keyword id="23778373" type="General" weightage="20" keywordseo="hedging-risk" source="keywords">hedging risk</keyword>. Also, the regulator has suggested approving locked-in units for REITs and InvITs to be transferred among sponsors and their groups, similar to rules for promoters in listed companies, to help sponsors manage their holdings without compromising "skin in the game". Additionally, Sebi has suggested permitting fixed deposits to be considered as cash equivalents when calculating leverage for REITs and InvITs, clarifying credit rating requirements for REIT and InvIT borrowings, and setting a timeline for filling vacancies on their boards and expanding the asset base for REITs and SM REITs. The regulator has also proposed to permit REITs to invest in liquid mutual funds. It has suggested measures to facilitate ease of doing business for REITs and InvITs, along with investors' protection. According to its consultation paper, Sebi is considering allowing REITs and InvITs to hedge against interest rate fluctuations by using derivatives like interest rate swaps. This could help stabilise cash flows, reduce risks, and protect unitholder interests, especially for long-term infrastructure projects. It is also proposed to define "Common Infrastructure" for REIT regulations. To enhance business flexibility for REITs, it has been proposed to clarify that facilities like power plants, heating/cooling systems, water treatment, and waste treatment plants -- serving one or more REIT assets -- will qualify as "common infrastructure" under REIT rules. This applies even if these facilities are not located within a single project due to their technical requirements. These facilities should supply and be used exclusively by REIT assets. For power plants, however, any excess power can be sold to the state utility/grid as per regulations, with any credits or payments going towards the benefit of REIT assets. To improve transparency, it has been proposed to amend the governance norms for quarterly reporting of InvITs. Currently, quarterly results for the investment manager and its business segments are presented to the investment manager's board, but there is no direct requirement for InvITs to report their performance. The proposed amendment would clarify that quarterly results should specifically reflect the performance of the InvITs themselves, not just the investment managers. This change aligns InvIT regulations with REIT regulations, where the focus is on the quarterly results of the REIT itself. Also, it has been suggested to align the composition of NRCs in REIT and InvIT managers with listed companies under the LODR regulations. Currently, all NRC members for REITs and InvITs must be independent directors. The proposal allows a mix of independent and non-executive directors, similar to listed companies. To enhance investors' protection, Sebi has suggested reviewing conditions for InvITs to borrow beyond the 49 per cent limit, assessing REIT investments in unlisted equity shares and outlining the roles and responsibilities of trustees for REITs, InvITs, and SM REITs. In a separate consultation paper, the regulator has proposed a regulatory framework for "restricted return InvITs" to provide infrastructure investors with predictable returns by setting limits on both upside gains and downside protection. The proposed framework for restricted return InvITs is designed to provide investors with structured returns, capped at both minimum and maximum levels to offer stability. Restricted return InvITs would include downside protection -- a minimum assured return -- and/or an upside restriction, a cap on returns -- depending on the arrangement. These investments would be limited to sophisticated investors who meet high minimum investment thresholds, with each unit priced at a minimum of Rs 500 crore and total InvIT assets of at least Rs 50,000 crore. Investors would be required to sign a waiver and undertaking form, acknowledging their understanding of the structured returns and risks involved, including the transfer of any excess returns to the sponsors. This waiver should be submitted before purchase in both primary and secondary markets, with compliance overseen by merchant bankers or brokers. The Securities and Exchange Board of India (Sebi) has sought public comments on both consultation papers by November 13.

Sebi proposes to allow InvITs, REITs, SM REITs to use interest rate derivatives for hedging risk

The potential Small and Medium <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">Real Estate</keyword> <keyword id="19895437" type="General" weightage="20" keywordseo="investment" source="keywords">Investment</keyword> Trusts (<keyword id="20968871" type="General" weightage="100" keywordseo="SM-REITs" source="keywords">SM REITs</keyword>) <keyword id="19913381" type="General" weightage="20" keywordseo="market" source="keywords">market</keyword> size in <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword> is expected to exceed USD 60 billion by 2026, real estate consulting firm <keyword id="20060150" type="General" weightage="20" keywordseo="CBRE" source="keywords" meta.keywordsubtype="org" meta.entityname="CBRE" meta.hostid="153" meta.entityid="CBRE">CBRE</keyword> South Asia Pvt. Ltd said in a report. As per CBRE estimates, the potential market for SM REITs in India is over 300 million sq. ft. of completed <keyword id="22958317" type="General" weightage="20" keywordseo="commercial-office-space" source="keywords">commercial office space</keyword>, with an additional 50 million sq ft expected to be completed by 2026. The forecast reflects a growing interest in SM REITs, which are expected to play a key role in shaping the future of India's commercial real estate landscape. The total completed office stock in India currently stands at over 800 million sq. ft., out of which REIT-listed office inventory is recorded at over 88 million sq. ft. Furthermore, according to the report, Mumbai recorded the highest potential SM REIT-ready completed office stock of 75 million sq. ft. as of June'24, with around 10+ mn. sq. ft. of upcoming supply by 2026. Delhi-NCR recorded a completed SM REIT-ready potential stock of 70+ mn. sq. ft., followed by Bengaluru with 50+ mn. sq. ft. and Hyderabad with 30+ mn. sq. ft., as per the report. It is estimated that cumulatively Delhi-NCR, Bengaluru and Hyderabad could add an additional supply of potential SM REIT-worthy stock of 36 mn. sq. ft. by 2026. Other cities such as Pune, Kolkata, and Chennai recorded 25+ mn sq. ft. of completed supply as of June'24. It is estimated that Pune, Kolkata, and Chennai would cumulatively record additional supply of potential SM REIT-worthy stock of 14 mn. sq. ft. over the next two years. The report underscored the importance of the SM REITs, saying that the newly-introduced framework represents a significant step forward for India's fractional ownership landscape. Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East, and Africa, CBRE, said the introduction of the SM REITs framework marks a pivotal moment for India's commercial real estate sector. "By enhancing transparency and offering robust investor protections, SM REITs are set to redefine portfolio diversification. This framework will not only mitigate risks associated with under-construction projects but will also ensure steady returns through mandatory quarterly distributions, making real estate a more accessible and secure investment option for a broader range of investors." Building upon the success of traditional REITs and InvITs, which, according to the Reserve Bank of India, have cumulatively accumulated Rs 1.3 trillion in asset value in the past four years, SM REITs hold immense promise, the report said. It said they offer the potential to unlock price discovery and exit opportunities for investors in smaller, high-occupancy assets. By pooling such assets, SM REITs can drive improved property upkeep, ESG compliance through potential retrofitting, and an enhanced tenant profile. This could ultimately contribute to a more organised and efficient real estate ecosystem with a stronger asset profile, the report mentioned. Moreover, the <keyword id="19908389" type="General" weightage="20" keywordseo="union-budget" source="keywords">Union Budget</keyword>, 2024-25's decision to reduce the holding period for determining long-term capital gains on listed business trusts--REITs and InvITs -- from 36 to 12 months aligns these instruments with listed equity shares, the report said. This tax parity is expected to bolster the appeal of SM REITs as an investment vehicle, it added.

India's SM REITs market value likely to exceed USD 60 billion by 2026: Report

Nearly 90 per cent of respondents feel that their decision to buy residential properties will be significantly impacted if <keyword id="19979912" type="General" weightage="100" keywordseo="mortgage-rates" source="keywords">mortgage rates</keyword> exceed 9 per cent, according to a survey conducted by <keyword id="20126006" type="General" weightage="20" keywordseo="FICCI" source="keywords" meta.keywordsubtype="org" meta.entityname="FICCI" meta.hostid="261" meta.entityid="FICCI">FICCI</keyword> and Anarock. Industry body FICCI and <keyword id="19895040" type="General" weightage="20" keywordseo="real-estate" source="keywords">real estate</keyword> consultant Anarock on Friday released their joint '<keyword id="23563125" type="General" weightage="20" keywordseo="homebuyer-sentiment" source="keywords">Homebuyer Sentiment</keyword> Survey', with a sample size of 7,615 people, at a real estate conference here. "In a recent survey, over 71 per cent of respondents indicated that their home-buying decisions would remain unaffected if rates stay below 8.5 per cent. However, if rates exceed 9 per cent, then it will have a significant impact on over 87 per cent of respondents. For rates between 8.5 per cent and 9 per cent, about 54 per cent expect a moderate influence on their choice," the report said. Among other findings, the survey found that real estate is the most preferred asset class for investment for over 59 per cent of respondents. The <keyword id="23597323" type="General" weightage="20" keywordseo="Indian-residential-market" source="keywords">Indian residential market</keyword> continues to be predominantly driven by end-users, with over 67 per cent of survey participants buying properties for self-use. The survey revealed that the budget range of Rs 45-90 lakh continues to be the most favoured option for over 35 per cent of prospective homebuyers. Currently, over 28 per cent of survey respondents stated their preference for homes priced between Rs 90 lakh and Rs 1.5 crore. Top homebuyer demands are timely project completion (98 per cent), improved construction quality (93 per cent), and well-ventilated homes (72 per cent). Addressing a FIICI event, Pramod Rao, Executive Director, <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, underscored the importance of regulatory frameworks in driving sustainable growth in the real estate sector. "Investor confidence is vital for the industry's long-term success, and SEBI's focus on transparency and governance has been key in building this trust," Rao said, according to a FICCI statement. Rao emphasised that strong compliance and better disclosures will be crucial in attracting institutional investments. He also highlighted SEBI's initiatives, including a single dashboard data bank to streamline processes and efforts to convert real estate investments into tradable financial instruments, boosting liquidity and accessibility. Sandip Somany, Past President, FICCI and Mentor, FICCI Committee on Urban Development and Real Estate, and CMD, Somany Impresa Group, said, "The Indian real estate sector has shown remarkable evolution. The significant shift in consumer preferences away from ready-to-move homes towards under-construction properties indicates growing confidence in developers and the regulatory environment." This trend reflects a maturing market and the positive impact of regulatory measures like RERA, he added. Raj Menda, Chairman, FICCI Committee on Urban Development and Real Estate and Chairman of the Supervisory Board, RMZ Corporation, said, "India's economic growth is driving rapid expansion in the real estate sector, with the residential market projected to reach USD 1.04 trillion by 2029, growing at a 25.6 per cent CAGR. This growth is fuelled by rising demand for ultra-luxury properties and significant investments." The commercial real estate sector is also thriving, supported by 1,600 Global Capability Centers and emerging secondary markets, Menda said. Anarock Chairman Anuj Puri said the consumer sentiment survey is timely and important, as it gauges contemporary homebuyers' preferences in the current market environment and highlights currently significant trends in Indian residential real estate. Sanjay Dutt, Managing Director and CEO of Tata Realty and Infrastructure, highlighted the significant evolution of the real estate sector, particularly with the shift from traditional REITs to smaller-scale REITs (SM REITs). He emphasised the advantages of fractional ownership, noting how it allows investors to access high-quality assets with lower capital commitments, democratising <keyword id="21263843" type="General" weightage="20" keywordseo="real-estate-investment" source="keywords">real estate investment</keyword>. Gaurav Pandey, Co-Chairman of the FICCI Committee on Urban Development and Real Estate and Managing Director and CEO of Godrej Properties, stated, "<keyword id="20383235" type="General" weightage="20" keywordseo="institutional-investors" source="keywords">Institutional investors</keyword> are increasingly focused on wealth creation through the development of better-quality products in the real estate sector." He highlighted the distinct growth stories of various cities, noting that Pune stands out as a frontrunner in this regard. Pandey emphasised that sustainability has become a critical priority for all large developers, reflecting a collective commitment to responsible and eco-friendly practices that will shape the industry's future." In his address, Vipul Roongta, Co-Chairman of the FICCI Committee on Urban Development and Real Estate and Managing Director and CEO of HDFC Capital Advisors Ltd emphasized on the critical importance of investing in skilled labour and workforce development to drive progress. Additionally, Roongta underscored the essential role of the private sector in creating impactful, scalable solutions to meet the growing demand in the industry.

Homebuying decision may be impacted if mortgage rates cross 9%: FICCI-Anarock survey

Capital markets regulator <keyword id="20378396" type="General" weightage="20" keywordseo="Sebi-Chief" source="keywords">SEBI Chief</keyword> <keyword id="19922107" type="General" weightage="20" keywordseo="madhabi-puri-buch" source="keywords">Madhabi Puri Buch</keyword> on Monday refrained from commenting on the investment vehicle, <keyword id="20024284" type="General" weightage="20" keywordseo="real-estate-investment-trusts" source="keywords">Real Estate Investment Trusts</keyword> (REITs), saying if she comments on the subject, she will be accused of <keyword id="20339010" type="General" weightage="20" keywordseo="conflict-of-interest" source="keywords">conflict of interest</keyword>. The remarks came as US short-seller <keyword id="20016892" type="General" weightage="20" keywordseo="Hindenburg-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindenburg Research" meta.hostid="261" meta.entityid="Hindenburg Research">Hindenburg Research</keyword> raised questions about a potential conflict of interest involving Buch and private equity major <keyword id="20144468" type="General" weightage="20" keywordseo="Blackstone" source="keywords" meta.keywordsubtype="org" meta.entityname="Blackstone" meta.hostid="261" meta.entityid="Blackstone">Blackstone</keyword>. Her husband Dhaval Buch is a senior advisor with Blackstone, a major player in the <keyword id="20009947" type="General" weightage="100" keywordseo="REIT" source="keywords">REIT</keyword> space. However, the couple refuted the allegations. Also, Hindenburg alleged that SEBI's recent amendments to REIT regulations 2014 favoured a specific financial conglomerate, which the markets regulator denied. Speaking at an event organised by industry body CII, Buch said," If I utter the word REITs, I am accused of conflict of interest". REITs are a new concept in the Indian market but have been a popular choice globally for their lucrative returns and capital appreciation. A REIT is made up of a portfolio of commercial real estate assets, the majority of which are already leased out. Meanwhile, the <keyword id="19895371" type="General" weightage="20" keywordseo="Congress" source="keywords" meta.keywordsubtype="org" meta.entityname="Congress" meta.hostid="261" meta.entityid="Congress">Congress</keyword> on Monday levelled fresh conflict of interest allegations against Buch and asked Prime Minister <keyword id="19895781" type="General" weightage="20" keywordseo="narendra-modi" source="keywords">Narendra Modi</keyword> to come clean as the head of the appointments committee of the cabinet on her appointment. At a press conference, the Congress alleged that since the current SEBI chairperson took office in 2017, she has not only been drawing a salary from SEBI but has also been holding an office of profit at the ICICI Bank, continuing to receive income from them to this very day. SEBI didn't make any comment on the allegations made by the Congress. Last week, the SEBI Chief stated that there has been a positive response to small and medium REITS (real estate investment trusts) and industry players came forward for regulations on such entities. Recently, the Securities and Exchange Board of India (SEBI) implemented regulations for small and medium real estate investment trusts (SM REITS) aimed at significantly increasing investor interest in fractional ownership of real estate assets.

If I say anything on REITs, will get accused of conflict of interest, says SEBI Chief

In its latest report, US-based investor activist firm Hindenburg, lashed out at market regulator <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword> chief <keyword id="19922107" type="General" weightage="20" keywordseo="Madhabi-Puri-Buch" source="keywords">Madhabi Puri Buch</keyword>, alleging her and her husband, <keyword id="22743439" type="General" weightage="20" keywordseo="Dhaval-Buch" source="keywords">Dhaval Buch</keyword> of having stakes in the same offshore funds which had previously been utilised by Gautam Adani's brother, <keyword id="20283220" type="General" weightage="20" keywordseo="Vinod-Adani" source="keywords">Vinod Adani</keyword>. Earlier last year, Hindenburg had come out with a report, arguing that the research firm had identified multiple instances where they had found that Adani Group was complicit in stock manipulation, and accounting frauds. The report mentioned around 38 Mauritius based shell entities which were directly controlled by Vinod Adani, or his associates, in addition to other suspected entities under his control, which were based out of Cyprus, the UAE, Singapore and Caribbean islands. It had also alleged that SEBI's distinct lack of regulatory action against the conglomerate, despite overwhelming evidence provided by them was disappointing. Now, in its latest report, it notes that "SEBI’s unwillingness to take meaningful action against suspect offshore shareholders in the Adani Group may stem from Chairperson Madhabi Buch’s complicity in using the exact same funds used by Vinod Adani, brother of Gautam Adani". We decode all that you need to know about the <keyword id="22758620" type="General" weightage="100" keywordseo="Adani-Hindenburg-saga" source="keywords">Adani-Hindenburg saga</keyword>. <h2>What is Buch being accused of?</h2>Three major things, really. First, quoting various whistleblower documents, Hindenburg alleged that during her tenure as a whole-time member at SEBI between 2017 and 2022, Buch maintained a 100% stake in Singapore-based Agora Partners. Two weeks post her appointment as SEBI's chairperson in March 2022, Buch privately emailed the fund, asking them to transfer all her share's to her husband's name. Second, during her tenure, Madhabi's husband, Dhawal Buch had been appointed as senior advisor at <keyword id="20144468" type="General" weightage="20" keywordseo="Blackstone" source="keywords" meta.keywordsubtype="org" meta.entityname="Blackstone" meta.hostid="261" meta.entityid="Blackstone">Blackstone</keyword>, a prominent global name in real estate and private equity. To this date, he maintains this position. Blackstone has, till date, sponsored three <keyword id="20186402" type="General" weightage="20" keywordseo="REITs" source="keywords">REITs</keyword> in India, including Embassy Office Parks REIT, Mindspace REIT, and Nexus Select Trust. As such, this results in a massive conflict of interest. The <keyword id="20016892" type="General" weightage="20" keywordseo="Hindenburg-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="Hindenburg Research" meta.hostid="261" meta.entityid="Hindenburg Research">Hindenburg research</keyword> alleges that during Buch significantly altered regulations, in order to favor investments in REITs (real estate investment trusts). As the short seller noted, "Buch touted REITs as her favorite products for the future, and urged investors to look positively upon the asset class". But, as the firm highlights, she did not explicitly ever mention that her husband is associated with Blackstone, a company which stands to gain significantly from such investments. Thirdly, as Hindenburg research explains, Madhabi currently holds a 99% stake in Agora Advisory, an India-based consulting firm where her husband also serves as a director. Per reports, at the end of FY22, the firm's revenue stood at Rs 19.8 million, which is about 5 times her disclosed salary as a whole-time SEBI member. <h2>How has Buch retorted to each of these allegations? </h2>On first, Buch notes that investment in the fund cited by Hindenburg in its research had been made in 2015, when she held no public position of note, and was 2 years away from joining SEBI as a whole-time member. Moreover, the decision to invest in this fund was largely because Anil Ahuja, who was the erstwhile chief investing officer (CEO) of the fund, was a childhood friend of Dhaval Buch, apart from having a long career in investing, having worked with Citibank and JP Morgan. During this time, the fund did not invest in any bonds or shares issued by companies of Adani Group. On second, Buch made it clear that Dhaval was hired by Blackstone on account of his deep expertise in supply chain management. Once this happened, Blackstone was immediately added to Madhabi's recusal list. Additionally, regulatory decisions are not solely taken by the chairperson, but come into existence after intense public discussion. And thirdly, both Agora Advisory in India, and Agora Partners in Singapore were made dormant after Buch was appointed as SEBI chairperson. Per the joint statement issued by the Buchs, "These companies (and her shareholding in them) were explicitly part of her disclosures to SEBI." <h2>What kind of financial impact are we estimating? </h2>Stocks of Adani companies found themselves swimming in red today. Adani Ports dipped by 1.78%, while Adani Enterprises and ACC fell by over 1% each during trade today. Adani Total Gas plunged by over 3%, while Adani Wilmar also sunk by over 2%. With the shares cumulatively experiencing over 7% fall, estimates suggest that over Rs 53,000 crore worth of investor wealth was wiped off today. The news does not bode well for India's mutual fund companies, who have a total of Rs 41,814 crore on Adani companies. As for REITs, data from IRA (Indian REITs Association) suggests that there are, at present, four listed REITs on the Indian stock exchanges, collectively managing assets worth over ₹1,40,000 crores and serving more than 240,000 unitholders. "These REITs have distributed over ₹18,000 crores, with the market capitalization of this rapidly growing asset class reaching approximately ₹80,000 crores", the association notes. As the research firm disclosed, it made Rs 34 crores shorting (borrowing a stock who's value you anticipate will fall, and then sell it in markets to earn profits). According to media reports, about 111 mutual fund schemes have invested around Rs 14,000 crore in Adani Ports and SEZ. How has Hindenburg doubled down? In a fresh salvo, Hindenburg notes that this admission confirms that Madhabi and Dhaval Buch had indeed, "invested in an obscure Bermuda/Mauritius fund structure, alongside money allegedly siphoned by Vinod Adani, the brother of Gautam Adani". "She also confirmed the fund was run by a childhood friend of her husband, who at the time was an Adani director. SEBI was tasked with investigating investment funds relating to the Adani matter, which would include funds Mrs. Buch was personally invested in, and funds by the same sponsor which were specifically highlighted in our original report. This is obviously a massive conflict of interest," the firm said. Another accusation that has gone the SEBI chairperson's way is that even while she was serving as SEBI chief, Buch continued to earn revenues from her active consulting firms, and also making deals under her husband's name all the while she served as SEBI's whole-time member. <h2>What's next? </h2>Taking note of Hindenburg's report, SEBI released a statement asking investors to "remain calm and exercise due diligence before reacting to such reports. Investors may also like to take note of the disclaimer in the report that states that readers should assume that Hindenburg Research may have short positions in the securities covered in the report", it said. "The allegations made by Hindenburg Research, against the Adani Group, have been duly investigated by SEBI. Hon’ble Supreme Court in its Order of January 3, 2024 noted that SEBI had completed twenty–two out of twenty–four investigations into the Adani group. Subsequently, one more investigation was completed in March 2024, and one remaining investigation is close to completion. During the ongoing investigation in this matter, more than 100 summons, around 1,100 letters and emails have been issued to seek information", it continued.

Adani Hindenburg case: All your questions answered

<ul><li><keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> is looking to bring in norms for follow-on offers by real estate investment trusts (<keyword id="11931834" type="General" weightage="20" keywordseo="REITs" source="Orion">REITs</keyword>) and infrastructure investment trusts (<keyword id="6425787" type="General" weightage="20" keywordseo="InvITs" source="Orion">InvITs</keyword>).</li><li>The time taken for allotment and listing after the closure of the issue was reduced from 12 to six working days.</li><li>The OFS mechanism has also been made available to unitholders or sellers of listed REITs and InvITs to offer their holdings through stock exchange mechanisms.</li></ul> To develop the market for emerging investment instruments, SEBI is looking to bring in norms for follow-on offers by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs). REITs and InvITs were introduced in India to provide investors with an opportunity to gain exposure to real estate and infrastructure projects respectively, with diversification of risks through pooling arrangements. Generally, REITs invest majorly in completed and rent-generating real estate assets. Privately placed InvITs can invest in under-construction assets as well as completed and revenue-generating assets and public InvITs can invest majorly in completed and revenue-generating assets. "Taking cognizance of the potential of REITs and InvITs in driving the future of Indian infrastructure, SEBI would endeavour to further develop the market for REITs and InvITs in the coming years through policy measures including considering bringing in norms for follow-on offers by REITs and InvITs," SEBI said in its annual report for 2022-23. <keyword id="18467788" type="General" weightage="80" keywordseo="krishnan-s-iyer" source="Orion">Krishnan S Iyer</keyword>, CEO, of NDR InvIT Managers, said given the capital requirements needed for the growth of infrastructure, it is very important that both domestic institutions, mutual funds, and of course retail investors increasingly participated in it. "These are well structured, regulated, and transparent vehicles that give them an avenue for developing a perpetual stream of cash flows, " Iyer added. The <keyword id="6355630" type="General" weightage="80" keywordseo="securities-and-exchange-board-of-india" source="Orion">Securities and Exchange Board of India</keyword> (SEBI) has been continuously engaged in strengthening the regulatory framework as well as in easing the process for these two products. To streamline the process of public issues of REITs and InvITs, the time taken for allotment and listing after the closure of the issue was reduced from 12 to six working days. Similarly, for privately placed InvITs, the time taken was reduced from 30 to six working days. These measures will help enhance liquidity in the market and bring about parity with equity instruments. The OFS mechanism has also been made available to unitholders or sellers of listed REITs and InvITs to offer their holdings through stock exchange mechanisms. "REITs and InvITs are other innovative mechanisms to finance real estate and infrastructure which in turn can have a multiplier impact on India's economic growth," SEBI said. Last week, SEBI notified rules introducing special rights to unitholders of REITs who can now nominate representatives on the boards. Also, the regulator introduced the concept of a self-sponsored REIT. REITs and InvITs have continued to witness interest from the market with three new InvIT registrations and one new REIT registration during 2022-23. This takes the total registered entities to 20 for InvITs and five for REITs. Further, the net asset value managed by REITs stood at Rs 70,614 crore whereas for InvITs it was Rs 1,76,957 crore as on March 2023. Total funds raised by InvITs during 2022-23 stood at Rs 6,360 crore and no fresh capital was mobilized by REITs during the year. SEE ALSO:<a href="https://www.businessinsider.in/business/auto/webstories/audi-has-announced-the-launch-of-the-q8-e-tron-and-the-q8-sportback-e-tron-electric-cars-in-india/slidelist/102836760.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/webstories/audi-has-announced-the-launch-of-the-q8-e-tron-and-the-q8-sportback-e-tron-electric-cars-in-india/slidelist/102836760.cms" target="_blank">Audi Q8 e-tron and Q8 Sportback e-tron launched in India with more than 500 KM Range</a> <a href="https://www.businessinsider.in/tech/news/indian-pc-market-declines-for-fourth-consecutive-quarter-reports-15-decline/articleshow/102822733.cms">Indian PC market declines for fourth consecutive quarter, reports 15% decline</a> <a href="https://www.businessinsider.in/tech/mobile/news/india-crosses-the-2-billion-mark-in-its-journey-to-become-a-smartphone-manufacturing-powerhouse/articleshow/102760757.cms">India crosses the 2 billion mark in its journey to become a smartphone manufacturing powerhouse</a>

SEBI plans to bring follow-on offer rules for REITs, InvITs

<ul><li><keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> has introduced new investment criteria to mitigate risks associated with <keyword id="509133" type="General" weightage="20" keywordseo="fractional-ownership" source="Orion">fractional ownership</keyword> of <keyword id="6354553" type="General" weightage="20" keywordseo="real-estate" source="Orion">real estate</keyword>. </li><li>You should research the <keyword id="6354516" type="General" weightage="20" keywordseo="property" source="Orion">property</keyword>, its location, market trends, and potential risks before investing. </li><li>Fractional ownership platforms operate by purchasing pre-leased commercial properties and dividing the ownership among investors. </li></ul>Owning real estate is not just a financial decision, in many cases, it’s a deep-rooted emotional one for many households. Buying commercial real estate, on the other hand, has always been touted as a wise economic decision. But how can one own such an asset if you can’t afford it given that the price of commercial properties is often too high for most individuals? You can still invest to avail a slice of real estate through fractional ownership! Minimum investment required Previously, the minimum investment required for fractional ownership of real estate varied, typically ranging from ₹10 to ₹25 lakhs. However, most platforms standardised the minimum investment at ₹25 lakhs. With the introduction of new regulations from SEBI, this threshold has been lowered to ₹10 lakhs making it more accessible to a broader range of investors. Fractional ownership options in India are still limited. However, while the concept is relatively new, it has quickly garnered <keyword id="6368449" type="General" weightage="20" keywordseo="investor" source="Orion">investor</keyword> interest. The fractional ownership industry is currently estimated to have ₹4,000 crores AUM and is expected to experience substantial growth, with projections suggesting it could reach a size of $5 Bn+ AUM by 2030, as per a JLL report. The number of platforms offering these investment opportunities is still limited, reflecting the industry's early stage of development. However, there were no defined rules on fractional ownership until SEBI stepped in recently. What SEBI says regarding fractional ownership To safeguard investor interests and foster growth in the Real Estate Investment Trusts (REIT) and fractional ownership market, SEBI has implemented a distinct framework tailored for small and medium (SM) (REITs). “SM REITs are structures that pool funds ranging from at least ₹50 crore to less than ₹500 crore, with the aim of issuing units to a minimum of 200 investors. These funds are utilised to acquire real estate assets, ensuring investors receive income generated from such assets. Going forward, any firm offering product (FOP) intending to establish an SM REIT must seek SM REIT registration from SEBI,” says Sudeep Chandran, Founder and COO of YOURS, a platform for Fractional Ownership of Luxury Second Homes. SEBI has also introduced new investment criteria to mitigate risks associated with fractional ownership. “It mandates that at least 95% of a scheme's assets must be invested in completed and income-generating properties, while the remaining 5% can be allocated to liquid assets. Furthermore, SEBI has issued additional rules and guidelines aimed at enhancing the sector's performance and safeguarding investors' interests," says Aryaman Vir, CEO of WiseX, a real estate investment platform that facilitates fractional ownership. Fractional ownership platforms Fractional ownership platforms operate by purchasing pre-leased commercial properties and then dividing the ownership among investors using a special purpose vehicle (SPV) structure. An SPV is a distinct legal entity set up for the sole purpose of acquiring a specific real estate asset, allowing for a clear separation of this investment from other financial engagements. Investors participate by acquiring securities issued by the SPV, effectively gaining a fractional share in the property. “The costs associated with the acquisition and maintenance of the property are distributed among the investors in the SPV, and these investors then share in the profits and returns from the asset. This sharing takes into account the management and maintenance fees that are levied by the FOP or by appointed third parties. Such a structure provides investors with an accessible route to earn from real estate, offering benefits like rental yields and potential asset appreciation,” says Vir. This model of investment significantly reduces the financial burden on individual investors, allowing them to attain steady income streams and long-term financial returns. Furthermore, it enables investors to diversify their investment portfolios by engaging in various real estate projects located in different areas, with each project having its own SPV. What you should keep in mind Before you enter into an agreement, review the agreement thoroughly to understand your rights, responsibilities, and any potential limitations or restrictions associated with the fractional ownership arrangement. “Like traditional property investment, due diligence is a must. You should research the property, its location, market trends, and potential risks before investing. Consider factors such as property valuation, maintenance costs, and resale prospects,” says Chandran. Also, when you co-own a property through a platform, credibility, reputation, and track record of the fractional ownership platform facilitating the investment also become important. Look for platforms that have a reliable track record of adhering to regulatory guidelines, providing transparent information, and offering robust investor protection mechanisms.

You can own a fraction of a real estate property, but it pays to keep the following in mind

<ul><li>FPIs with over 50% of their equity assets under management in a single corporate group or holding more than Rs 25,000 cr in Indian markets will need to comply.</li><li>The new requirements will come into effect in three months for existing FPIs and six months for newcomers.</li><li>The decision also comes against the backdrop of the recent Adani-Hindenburg saga. </li></ul> Foreign Portfolio Investors (FPIs) that concentrate holdings in a single corporate group will now have to furnish details about ownership and economic interests to the Indian market regulator, <keyword id="35210" type="General" weightage="80" keywordseo="sebi" source="Orion">Sebi</keyword>. In a late release on Wednesday, Sebi decided to mandate enhanced disclosures from certain class of <keyword id="725142" type="General" weightage="80" keywordseo="fpi" source="Orion">FPI</keyword>s in a move is aimed at preventing possible circumvention of Minimum Public Shareholding (MPS) requirements and potential misuse of the FPI route to guard against the inherent risks of opportunistic takeover of Indian companies. The decision also comes against the backdrop of the recent Adani-Hindenburg saga. Under the new proposed framework, FPIs with concentrated single group equity exposures or significant equity holdings will be mandated to make additional granular disclosures. Such FPIs would be required to provide granular level disclosures regarding ownership, economic interest, and control rights on a full look-through basis, the regulator said in a release. The regulator said that FPIs holding more than 50% of their equity Asset Under Management (AUM) in a single corporate group or FPIs that individually, or along with their investor group hold more than Rs 25,000 crore in the Indian markets would be required to comply with the new requirements. Briefing reporters after the board meeting, Sebi Chairperson Madhabi Puri Buch said the changes in norms related to FPI disclosures have been decided, based on the feedback from as many as 35 large players. Sebi Whole Time Member Anantha Narayan G said the new FPI norms to come to effect in three months for those already here and for new comers in six months. When asked about the impact on the market in case some of those FPIs refuse to make more disclosures, he said those FPIs which will have to make more disclosures collectively own equities worth under 1% of the BSE market capitalisation. On the delay in bringing out these norms, Buch said this was being worked on for the past 18 months or so but took time as it had to get the nod from the finance ministry on the PMLA (Prevention of Money Laundering Act) rules which in turn are based on the FATF (Financial Action Task Force) rules. As per the release, certain entities would be exempted from making such additional disclosures. These include government and government-related investors, pension funds and public retail funds, certain listed ETFs, corporate entities and verified pooled investment vehicles meeting certain conditions. Applicants with investors contributing 25% or more in the corpus that are mentioned in the Sanctions List notified by UN Security Council are ineligible for registration as FPIs, it added. In March 2023, PML Rules threshold requirements for identification of Beneficial Ownership (BO) were amended and currently stand at 10% for companies and trusts and 15% for partnerships and unincorporated association or body of individuals. Sebi board also approved changes to the FPI Regulations for aligning these eligibility criteria in the Regulations with the reduced threshold prescribed under PML Rules. Earlier this year, the US-based Hindenburg in its research report had alleged that certain FPIs held a significant stake in the listed firms of <keyword id="76451" type="General" weightage="30" keywordseo="adani" source="Orion">Adani</keyword> Group. The allegations were denied by the conglomerate. The move has its genesis in the Adani stocks issue where Sebi could not identify the beneficial owners of some foreign portfolio investments in Adani stocks since the existing regulations are lax in identifying the true owners of many investments. Earlier, in a consultation paper on FPIs, Sebi had said that some FPIs have been observed to concentrate a substantial portion of their equity portfolio in a single investee company/company group. Such concentrated investments raise the concern and possibility that promoters of such corporate groups, or other investors acting in concert, could be using the FPI route for circumventing regulatory requirements such as that of maintaining MPS, it had said. Decision on REITs and InvITs Meanwhile, in another important decision taken in the board meeting, to strengthen governance norms, the market regulator has decided to introduce special rights to unitholders of REITs and InvITs by providing the right to nominate representatives on the boards. Also, Sebi has decided to introduce the concept of a self-sponsored real estate investment trust (REIT) or an infrastructure investment trust (InvIT). The board of Sebi approved amendments to rules to provide nomination rights to unitholders holding 10% or more of the total outstanding units of the InvIT/REIT, either individually or collectively, on the board of directors of the investment manager/ manager. This ensures pro-rata rights to all unitholders. (Text input from PTI) If this were the case, the apparent free float in a listed company may not be its true free float, increasing the risk of price manipulation in such scrips, as per the consultation pa

Indian market regulator enhances disclosure norms for foreign portfolio investors

Mumbai, Mar 4 () Sebi is "internally assessing" the potential impact of the coronavirus epidemic on the capital markets, its Whole-Time Member S K Mohanty said on Wednesday. He, however, said the Financial Sector Development Council (FSDC), an apex body of regulators formed by the government, is yet to get involved in the discussions. The comments come a day after the action by central banks across the world, including a surprise 50 basis points cut in rates by the US Federal Reserve. The Reserve Bank of India (RBI) on Tuesday also came out with a statement assuring the markets of all help. "Sebi is aware of coronavirus and the possible impact that it can have on the market. We are taking the necessary steps," Mohanty told reporters here. "We have seen the RBI statement; we are aware of it. Whatever has to be done, has to be done. We are internally assessing the situation," he added. When asked if the issue has been discussed at FSDC, he said, "Not yet". Addressing a capital markets summit organised by industry lobby Assocham earlier, Mohanty said Sebi has taken up the contentious issue of taxation on real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) with the government. The Budget 2020-21 has provisions for changing the dividend distribution tax (DDT) for REITs and InvITs, which was seen as a dampener by the industry. "The taxation part is not in the hands of Sebi but we have taken it up with the government. Let's hope for the best," he said. "If that (change or amendment) happens, if we stick to the taxation incentive to REITs and InvITs given in 2016, if that is restored, then definitely India will get billions of dollars which will help our economy in a great way," he said. Speaking to reporters later, realtor Niranjan Hiranandani, who also chairs Assocham, welcomed the Sebi efforts. In 2019, India was able to get USD 20 billion in investments through the REITs and InvIT flows and the industry was expecting the same to go up to USD 30 billion in 2020, he said warning that continuing with the Budget provisions will adversely affect capital inflows into the country. The government is proposing to tax dividends at the hand of unit holders and there are concerns on double taxation as well, which have collectively put a question mark over the future of the business trusts' existing investments and also future plans. Mohanty said that so far, Sebi has been very supportive of the business trusts. Meanwhile, Mohanty also rued that there is a greater reliance on the "opaque" private markets for capital-raising, and also warned that such a trend does not bode well for the USD 5-trillion GDP target. He said there has been only a 1 per cent rise in the number of listed firms in India over the last three years, which he termed as "not a good sign.'' There is a "burden of compliances and disclosures" once a company opts for listing, while no such requirements are mandated if it continues as a private concern, which may be harm interests to list, he said. Even within the public issues, 80 per cent are offer-for-sales and not proposals for fresh capital-raising, he said. AA HRS

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