SEBI cuts offer for sale cooling-off period for illiquid private InvITs to eight weeks

The Securities and Exchange Board of India (SEBI) reduced the offer for sale (OFS) cooling-off period for illiquid private infrastructure investment trusts (InvITs) to eight weeks. This regulatory adjustment aims to enhance market liquidity and provide institutional investors with quicker exit mechanisms from privately held infrastructure assets. Regulatory cooling-off periods dictate the mandatory duration sponsors or unitholders must wait between successive share or unit sale transactions.

In private infrastructure vehicles, extended lock-in or cooling-off restrictions traditionally limit secondary market liquidity, whereas shorter intervals facilitate faster capital recycling for portfolio managers. Compliance officers and fund managers must update their internal transaction calendars and unitholder agreements to align with the new eight-week OFS timeframe. Monitor upcoming circulars from SEBI regarding private InvIT governance standards for any further procedural modifications.

Bottom line: shorter cooling-off intervals improve capital flexibility for infrastructure fund managers and institutional investors.