Nexus Select Trust share price debuts at premium, soars 4% against IPO issue price

India's first retail-focused REIT debuted on Friday. The REIT witnessed a single-digit premium listing, however, gained momentum as it opened on BSE and NSE. Nexus owns India's largest portfolio of consumption centres.

At the time of writing, Nexus' share price traded at ₹104 apiece on BSE, up by 1.7%. But compared to the upper price band of ₹100 in the IPO, the stock  listed at ₹102.27 apiece which is 2.3% premium. On this exchange, the stock's 52-week high is ₹104.90 apiece and 52-week low of ₹102.27 apiece. The stock is trading under 'IF' Group with a settlement type of 'T+1'.

On NSE, the REIT's stock performed at ₹103.63 apiece. Here, the stock price debuted at ₹103 apiece, a 3% premium from IPO's issue price. Meanwhile, the stock's 52-week high and low is at ₹104 apiece and ₹103 apiece respectively.

Trading in Nexus is in the Normal Market segment – Compulsory Demat (Rolling Settlement) for all investors, as per NSE.

Backed by leading alternative asset manager, Blackstone, Nexus is the first publicly listed consumption centre REIT in India.

On the listing day, Chris Heady, Chairman of Asia Pacific & Head of Real Estate Asia, Blackstone, said, “We are pleased to celebrate the successful launch of Nexus Select Trust, India’s first retail-focused REIT, and bring an unprecedented opportunity to investors. This reinforces our long-standing commitment to India, where we have been significant investors over the last 15 years.”

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Further, Tuhin Parikh, Head of Real Estate India, Blackstone, said, “This is the third REIT we have helped bring to India with the support of the government and its ongoing efforts to make India an attractive investment destination for global investors. India is a fast-growing economy with unique consumption tailwinds, and we believe Nexus Select Trust is uniquely positioned to benefit from these trends.”

Nexus Select Trust REIT IPO opened from May 9 to May 11 at a price band of ₹95 to ₹100 per equity share. The IPO size was ₹3,200 crore.

On the final day, the REIT IPO fully subscribed by 5.45 times. A massive response was received by investors. The institutional investors' category's reserved portion subscribed by 4.81 times, while other investors such as corporates, individuals, NRIs, and HUFs -- recorded an oversubscription of 6.23 times.

Wynford Investments which is a portfolio company of Blackstone funds is the sponsor of Nexus Select Trust.

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The retail-focused REIT has 17 best-in-class Grade A urban consumption centres, two complementary hotel assets, and three office assets. The REIT's portfolio has a tenant base of 1,044 domestic and international brands with 2,893 stores as of December 31, 2022, and is well diversified across cities with no single asset and tenant contributing more than 18.3% and 2.8% of its total Gross Rentals for the month of December 31, 2022, respectively.

Also, Nexus' assets are strategically located across 14 leading cities in India, which constituted 30% of India’s total discretionary retail spending in FY20 and had an average population CAGR that was 226 bps higher than the national average from financial years 2011 to 2021.

According to Sankey Prasad, Chairman & Managing Director, India at Colliers said, "After the successful listing of three office REITs, the maiden listing of India’s first Retail REIT aims at expanding the investible cosmos for investors. Retail sector has evinced greater investor interest as it continues to emerge stronger from the lows of pandemic."

Meanwhile, on retail-based REIT's potential, Prasad added, "REIT in the retail sector will not only institutionalize the segment but allow individual investors to own rent-yielding retail assets, thus allowing bigger & smaller investors to reap benefits of its innate growth potential. Driven by favourable demographics & rising consumption backed by quality supply from established developers, the sector is likely to see more investment traction in the next few years."

While Vimal Nadar, Head of Research at Colliers India said, "REIT in Retail is timely to unlock potential real estate value, as the sector is bouncing back, with developers & investors focusing on building, operating & acquiring profitable retail assets."

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