With the success of the Ascendas India Trust—the first India-focused real estate fund to get listed in Singapore on 1 August—more Indian companies may rush to the city-state for listing.
Sponsored by Ascendas Pte. Ltd, a Singapore-based business space developer, Ascendas India Trust’s $332 million (Rs1,341 crore) issue was subscribed 20 times. The trust listed at an 18% premium to its issue price of Singapore $1.18 (around Rs31.40). Currently, it is trading at S$1.44.
Singapore Exchange Ltd, or SGX, has 467 domestic and 255 foreign firms listed on it, including two Indian companies, Berger International Ltd and Meghmani Organics Ltd.
“Several foreign investment banks based in India have been approaching us to explore options of listing companies, business trusts and real estate investment trusts (Reits),” said Lawrence Wong, executive vice-president and head of listings at Singapore Exchange Ltd (SGX). He declined to give details as the talks are at a preliminary stage.
A business trust is an investment vehicle that allows assets with stable cash flows, such as infrastructure and shipping, to be transferred to a trust, which is managed by a trustee manager and listed on the exchange. Reits hold assets in a trust, but are managed by a separate asset manager.
Wong was in Mumbai for a round-table meeting with Indian merchant bankers, organized by the Bombay Stock Exchange (BSE). SGX holds 5% stake in BSE after the latter became a corporate entity in May by bringing down its broker members’ stake to 49%.
Apart from listing 467 domestic and 255 foreign firms, including two Indian ones (Berger International Ltd and Meghmani Organics Ltd), SGX also provides a platform for business trusts and Reits.
At present, 16 Reits from various Asian countries, such as China and Indonesia, are listed on SGX. Their combined market value is around $20 billion. Currently, five business trusts are listed on the bourse.
“If 90% of the property held under the trust is developed, only then it can list as an Reit on the exchange. Otherwise it has to list as a business trust,” Wong added.
Ascendas India Trust has promised to generate annual returns of 4.75% for the current fiscal by investing in IT parks in Bangalore, Chennai and Hyderabad. The units of the trust have been bought by insititutional investors in Singapore, Hong Kong, London, Australia.