Mumbai: Embassy Office Parks REIT, backed by global private equity giant Blackstone Group LP and Bengaluru-based developer Embassy Property Developments, plans to raise ₹4,750 crore in India’s first real estate investment trust (REIT) listing next week.
According to two people aware of the development, the initial public offering (IPO) of the REIT will open on 18 March and close on 20 March. The part of the offering reserved for institutional investors, known as anchor book, will be opened on 15 March. On Tuesday, Bloomberg reported that the offering will see the REIT sell as many as 158.6 million units at ₹299-300 per unit. Embassy Office Parks REIT filed its draft red herring prospectus with the markets regulator on 24 September last year and received the regulator’s go-ahead on 28 December.
Ahead of the IPO, the REIT has allocated units worth ₹876 crore to global investor Capital Group’s various funds such as New World Fund, SMALLCAP World Fund and Global Small Capitalization Fund. Units were allocated to these funds at ₹300 apiece, the prospectus shows.
According to the prospectus, Embassy REIT will use the funds raised for partial or full repayment or pre-payment of bank/financial institution debt of certain special purpose vehicles as well as for payment of consideration for acquisition of Embassy One assets.
The REIT’s portfolio comprises about 33 million sq. ft of office space across seven office parks and four prime city-centre office buildings as of 31 December, with strategic amenities, including two completed and two under-construction hotels totaling 1,096 keys, food courts, and employee transportation and childcare facilities. The REIT’s portfolio has an occupancy rate of 95% and over 160 bluechip tenants.
Office properties that are part of the REIT offering include the Express Towers at Nariman Point in South Mumbai and First International Finance Centre in the Bandra Kurla Complex.
Investment banks Morgan Stanley India Co. Pvt. Ltd, Kotak Mahindra Capital Co. Ltd, J.P. Morgan India Pvt. Ltd and DSP Merrill Lynch Ltd are the lead bankers managing the initial share sale.
The Embassy Office Parks public offering will be the largest public offering so far this year. So far, only one company—Chalet Hotels Ltd—has had an IPO in 2019, raising ₹1,641 crore in January. On Monday, state-owned MSTC Ltd said it will launch its ₹226 crore IPO on 13 March.
In 2018, 24 companies raised ₹30,959 crore through initial share sales, data from primary market tracker Prime Database shows.