Mumbai: The initial public offering (IPO) of Embassy Office Parks REIT, India’s first real estate investment trust, witnessed 20% subscription on the first day, according to stock exchange data. The Embassy REIT, backed by private equity firm Blackstone Group LP and Bengaluru-based developer Embassy Property Developments Pvt. Ltd, aims to raise ₹4,750 crore through the IPO with units issued in a price band ofRs 299-300 apiece.
The portion reserved for institutional buyers in the Embassy REIT IPO was subscribed 30%, while the quota for retail investors was subscribed 7%, as of 5pm on Monday.
The three-day Embassy REIT IPO closes on 20 March.
On Friday, the Blackstone-Embassy REIT raised ₹1,743 crore by allocating units to institutional investors as part of the so-called anchor book allocation, stock exchange filings showed.
The anchor book is that part of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscriptions open a day before the launch of an IPO and are seen as a gauge of institutional investor interest.
Fidelity International, Capital Group, TT International, and Schroders were among the foreign investors who bought Embassy REIT units. On the domestic side, the anchor book saw participation from Kotak Mahindra Life Insurance Co. Ltd and the family office of Radhakishan Damani, the promoter of Avenue Supermarts Ltd that runs the D-Mart chain of supermarkets.
Embassy REIT’s portfolio comprised about 33 million sq. ft of office space across seven office parks and four prime city-centre office buildings, as on 31 December. It includes strategic amenities, such as two completed and two under-construction hotels totalling 1,096 rooms and food courts, besides employee transportation and childcare facilities.
The REIT’s portfolio has an occupancy rate of 95%, housing more than 160 blue-chip tenants. Office properties, which 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 (BKC).
“After a long wait, India is finally witnessing the country’s first REIT listing. For investors, it will provide avenues for earning annuity income and capital appreciation, besides being an excellent tool for portfolio diversification. On the supply side, it will significantly increase the depth of the market and bring in more institutional players and capital. A successful REIT listing will provide significant boost to the scale of commercial projects and push the commercial space into a different growth paradigm," said Arvind Nandan, executive director research, Knight Frank India.