New Delhi: Realtor Indiabulls Real Estate Ltd, India’s fourth largest listed developer, has extended the share sale of its real estate investment trust, or Reit, in Singapore by a day, after it failed to attract 1,000 retail investors required for a listing. The offer will now close on 6 June.
“As per Singapore exchange regulations, we need a minimum of 1,000 retail investors,” said Ajit Mittal, president of corporate affairs and head, investor relations, at Indiabulls Real Estate. “We have already got 700 investors, and we are confident that by the end of the day, the retail investor portion will be subscribed.” The issue has already been subscribed 1.8 times, Mittal said.
Indiabulls plans to sell about 262 million shares in the proposed Indiabulls Properties Investment Trust. The company has priced the shares between 1 and 1.10 Singapore dollars (about Rs31.20 to Rs34.50) a share, looking to raise about $285 million from the sale. It is diluting 10% stake in the trust through the public offering.
“It is possible that because of the bad real estate market in India, investor interest might have cooled down a bit,” said an analyst with a domestic brokerage firm, who did not wish to be named. “The market for Reits is also down and an investor will only put in money if he thinks there will be an appreciation.”
Reits have evoked lukewarm response in the past few months of trading in Singapore. Ascendas India Trust, which listed in the island city in August, was trading at 1.11 Singapore dollars on Thursday, compared with its listing price of 1.18 Singapore dollars.
Indiabulls Real Estate and Farallon Capital Management Llc. own 40% and 47% stake, respectively, in the trust. Reits use money from investors to purchase and manage property. Their shares (or common units as they are called) are traded on major exchanges. Much of the income from the properties Reits own is shared among its investors.
Indiabulls also sold minority stakes in the trust to anchor investors before the share sale. L.N. Mittal, chief executive officer of ArcelorMittal, the world’s largest steel company, picked up a minority equity stake in the proposed Reit for $75 million (Rs319.5 crore). Merrill Lynch and Co. Inc. and Deutsche Bank AG are the bankers for the issue.