Nexus Select Trust REIT IPO lists at 3% premium

Blackstone-backed Nexus Select Trust made a positive debut on the domestic stock exchanges on Friday with the share price of the country’s first pure-play retail REIT (Real Estate Investment Trust) listing at ₹103, a 3% premium over the upper end of the initial public offering (IPO) band price of ₹100 apiece on the NSE. On the BSE, the REIT opened at ₹102.27, up 2.27% than its issue price. Post listing, the counter rose as much as 4.9% to hit a high of ₹104.90, while the market capitalisation climbed to ₹15,756 crore.  

With this, Nexus Select Trust became the fourth REIT to list on the exchanges and the first in retail space as all three listed REITs - Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust - are leased office assets.

The ₹3,200 crore IPO of Nexus, which opened between May 9-11, was subscribed 5.45 times as it received bids for more than 101 crore units against the issue size of 18.52 crore units.  The IPO comprised of fresh issue of units up to ₹1,400 crore and an offer for sale (OFS) of up to ₹1,800 crore.

The quote reserved for qualified institutional buyers (QIBs) was booked 4.81 times and that of non-institutional investors by 6.23 times. As per document filed with SEBI, the company had reserved up to 75% of the offer for qualified institutional investors and the remaining 25% for high networth individuals (HNI). 

The REIT intends to use net proceeds raised from the issue of fresh units towards repayments of debts, acquisition of stake, redemption of debt securities in certain special purpose vehicles (SPV), as well as to meet general corporate purposes. As of June 2022, Nexus had debt of ₹4,500 crore, which is likely to come down to ₹3,600 crore post fundraising.

Following a healthy response to the Nexus Select Trust IPO, Axis Capital said India's first Retail REIT - Nexus Select Trust has created history and attracts highest ever number of applications seen by a REIT public issue in India.

“This is an outstanding response in an extremely volatile market. Nexus REIT was the second largest IPO in last 12 months. This speaks about the strength of the Nexus platform and increasing acceptance of Yield product in the country,” said Chirag Negandhi, Co-CEO and Joint MD, Axis Capital.

With an enterprise value of ₹23,000 crore, Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, including Select Citywalk Mall in South Delhi, with a total leasable area of 9.2 square feet (msf), two complementary hotel assets (354 keys), and three office assets (1.3 msf) as of December 31, 2022. The company’s business portfolio includes assets that are mixed-use in nature with complementary hotels and office spaces like Hyatt Regency Chandigarh and Oakwood Residence Whitefield Bangalore (together constituting 2.8% of its gross portfolio market value as of June 30, 2022), which are managed by global hotel operators, Hyatt and Oakwood.

This was Blackstone’s third REIT listing on the domestic bourses after Embassy Office Parks and Mindspace Business Parks. The American private equity firm launched India's first REIT Embassy Office Parks in April 2019 after raising about ₹4,750 crore through a public issue. Mindspace Business Parks was the second REIT that was listed in August 2022 following fundraising of ₹4,500 crore via the IPO route.

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