Public Issues

94. The fund raising by an Investment Trust by way of public issue, shall be subject to compliance with the following: (a) The Investment Trust shall raise funds by way of initial public offer and any subsequent issue of units may be by way of follow-on offer, preferential allotment, qualified institutional placement, rights issue, bonus issue, offer for sale or any other mechanism and in such manner as may be specified by the Authority. (b) The Investment Trust, through the Investment Manager or an investment banker appointed by it, shall file a draft offer document along with the applicable fee, not less than thirty (30) working days before filing the offer document with the recognised stock exchange and the Authority. (c) The draft offer document filed with the Authority shall be made public for comments, if any, by hosting it on the websites of the Authority, recognised stock exchange(s) and Investment Manager, investment bankers associated with the issue, for a period of not less than fourteen (14) days. (d) The draft offer document and/ or offer document shall be accompanied by a due diligence certificate signed by the investment manager or investment banker, as the case may be. (e) The Authority may communicate its observations to the investment manager or investment banker within thirty (30) working days from the filing of the offer document or twenty-one (21) working days from the date of receipt of satisfactory reply from the investment manager or investment banker on the queries or clarification, if any, sought by the Authority, whichever is later. (f) The investment manager or investment banker shall ensure that all comments received from the Authority on the draft offer document are suitably incorporated prior to the filing of the offer document with the recognised stock exchanges. (g) The offer document shall be filed with the recognised stock exchange(s) and the Authority not less than five (5) working days before opening of the offer. (h) The initial offer or follow-on offer or rights issue shall be made by the Investment Trust within a period of not more than one (1) year from the date of issuance of observations by the Authority: Provided that if the initial offer or follow-on offer or rights issue is not made within the specified time period, a fresh draft offer document shall be filed. (i) The Investment Trust may invite for subscriptions and allot units to investors, subject to the applicable investment guidelines and permissions as may be applicable in that jurisdiction. (j) The initial offer and follow-on offer shall not be open for subscription for a period more than thirty (30) days. (k) In case of over-subscriptions, the Investment Trust shall allot units to the applicants on a proportionate basis rounded off to the nearest integer, subject to minimum subscription amount per subscriber. (l) The Investment Trust shall allot units or refund application money, as the case may be, within twelve (12) working days from the date of closing of the issue. (m) The Investment Trust shall issue units only in dematerialized form to all the applicants. (n) The price of Investment Trust units issued by way of public issue shall be determined through the book building process or in accordance with the circulars or guidelines issued by the Authority or the recognised stock exchange(s). (o) The Investment Trust shall refund money, - i. to all applicants in case it fails to collect subscription amount of exceeding ninety per cent. (90%) of the fresh issue size as specified in the offer document; ii. to applicants to the extent of oversubscription in case the money received is in excess of the extent of over-subscription as specified in the offer document: Provided that right to retain such over subscription cannot exceed twenty-five per cent. (25%) of the issue size: Provided further that the offer document shall contain adequate disclosures towards the utilisation of such oversubscription proceeds, if any, and such proceeds retained on account of oversubscription shall not be utilised towards general purposes. (p) Units may be offered for sale to public if such units have been held by the existing unitholders for a period of at least one (1) year prior to the filing of draft offer document with the Authority: Provided that the holding period for the equity shares, compulsorily convertible securities, from the date such securities are fully paid-up, or partnership interest in the holdco and/or SPV against which such units have been received shall be considered for the purpose of calculation of one (1) year period referred in this regulation: Provided further that the compulsorily convertible securities, whose holding period has been included for the purpose of calculation for offer for sale, shall be converted to equity shares of the holdco or SPV, prior to filing of offer document. (q) The amount for general purposes, as mentioned in objects of the issue in the draft offer document filed with the Authority, shall not exceed ten per cent. (10%) of the amount raised by the Investment Trust by issuance of units.