Nexus Select Trust REIT IPO: Most brokerage firms have given it a’subscribe rating,’ citing excellent prices, best-in-class assets, and the fact that there are no public real estate investment trusts in India’s retail sector.
The Nexus Select Trust REIT IPO received bids for 29.16 crore units against an offer size of 18.52 crore shares, with the issue being subscribed to 1.57 times in the afternoon of May 11, the final day of bidding.
The offer consists of a new issuance of Rs 1,400 crore in shares and an offer for sale (OFS) of Rs 1,800 crore in shares.
On May 8, the REIT collected Rs 1,440 crore through its anchor book.
In addition to normal business purposes, the company will use the proceeds of the new issuance to repay loans to asset special purpose vehicles and the investment entity, as well as to acquire stakes in and redeem debt instruments in certain asset SPVs.
As of December 2022, Nexus Select Trust had a portfolio of 17 Grade A urban consumption centres totaling 9.2 million square feet (msf), two complementary hotel properties (354 keys), and three office assets (1.3 msf).
Its portfolio includes 1,044 domestic and foreign brands with 2,893 shops as of December 2022.
‘Subscribe’ is a brokerage term.
Following the IPO, the trust’s equity value will be Rs 15,150 crore, and the NAV per unit in relation to the offer price will be 0.78 at the upper price range.
According to the pricing, “investors would receive an ongoing return of 8.3 percent pre-tax and 7.1 percent post-tax in terms of distributions made by the REIT.”
It has given the IPO a “subscribe” rating, citing Nexus as having India’s largest platform of best-in-class assets, with a presence in 14 key consuming markets and strategically situated in prime in-fill sites with strong obstacles to entry.
As of December 2022, Nexus REIT’s portfolio has a 96.2 percent average committed occupancy.
“The company will also declare and distribute at least 90% of the Nexus Select Trust’s net distributable cash flows as distributions to unitholders,” BP Wealth stated.
Embassy Business Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust REIT are already publicly traded.