SEBI Revises InvITs Rule with Regards to Payment for Fees for IPO

May 11, 2022
Current Context: SEBI has come up with new norms to implement draft filing fees to be paid by infrastructure investment trusts (InvITs) for IPO and rights issues.
SEBI Revises InvITs Rule with Regards to Payment for Fees for IPO
  • Firstly InvITs were required to pay non-refundable filing fees of 0.1 percent of the total issue size but now after amending the rules InvITs are required to pay non-refundable filing fees of 0.1 percent in the category of the initial offer and 0.05 percent in the case of rights issue of the total issue size.
  • Though InvITs are relatively new investment instruments in India but extremely popular in global markets.
  • According to present data, a total of Rs 21,195 crore was collected through InvITs in 2021-22.
  • The funds were raised in many ways like the initial offer, preferential issue, institutional placement, and rights issues.
  • As of now, 15 InvITs are registered with Sebi and from which 7 of them are listed on the stock exchanges.
  • Static Part
    • InvIts (Infrastructure Investment Trusts)
    • InvITs are nothing but similar to mutual funds, which pool investments from various categories of investors and invest them into completed and revenue-generating infrastructure projects,
    • They have been regulated under the Sebi (Infrastructure Investment Trusts) Regulations, 2014, and the Indian Trust Act, 1882.
  • Structure of InvIT:
    • Like mutual funds, they have a trustee, sponsor, investment manager, and project manager.
    • The trustee was given responsibility for inspecting the performance of an InvIT.
    • Basically, sponsors are promotors of the company that set up the InvIT.
    • The investment manager is looking after the task of supervising the assets and investments of the InvIT.
    • Finally project manager was entrusted with the execution of the project.

Question: 

Q.1 According to new norms of SEBI, InvITs should pay_____ percent of nonrefundable fees in case of the initial offer.
a. 1.0%
b. 0.5%
c. 0.1%
d. 1.2%

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