A real estate investment trust sponsored by Brookfield Asset Management Inc. is set to float its initial public offering (IPO) next week aiming to raise Rs 3,800 crore (about $520 million) through the issuance of fresh units.
This will be the third such public offering after Embassy Office Parks REIT, a joint venture between Bengaluru-based Embassy Group and private equity giant Blackstone, and Mindspace REIT backed by K Raheja and Blackstone.
The IPO of Brookfield India REIT having a price band of Rs 274-275 will open on Wednesday and close on Friday, said Brookfield in a statement.
VCCircle reported last week that Brookfield India REIT, which owns and manages four large campus-format office parks in metropolitan and top-tier cities in India, will hit the public market this quarter of January-March.
The IPO also involves a secondary market sale by Brookfield and affiliates. The total REIT offer size is pegged at Rs 4,400-4,500 crore ($602-615 million), two people in the know had told VCCircle in October.
The latest statement said net proceeds from the IPO issue will be used for partial or full pre-payment or scheduled repayment of existing debt of asset special purpose vehicles (SPVs) and for general purposes.
The asset SPVs had a total debt of Rs 5,628.94 crore as of July 2020.
Of the total issue, not more than 75% will be available for allocation on a proportionate basis to institutional investors, provided that the manager of the IPO, in consultation with the lead managers, allocates up to 60% of the portion to anchor investors on a discretionary basis in accordance with the rules.
Further, not less than 25% of the issue shall be available for allocation on a proportionate basis to non-institutional investors.
Bids can be made for a minimum lot of 200 units and in multiples of 200 units thereafter by bidders other than the units subscribed for by anchor investors.
Axis Trustee Services is the trustee, while BSREP India Office Holdings V Pte. Ltd. is the sponsor of the issue. Brookprop Management Services Private Limited is the manager.
The book-running lead managers of the issue are Morgan Stanley India, BofA Securities India, Citigroup Global Markets India and HSBC Securities and Capital Markets (India), Ambit Private, Axis Capital, IIFL Securities, JM Financial, JPMorgan India, Kotak Mahindra Capital and SBI Capital Markets.
Brookfield India REIT had filed the draft proposal for the IPO with the capital markets regulator in October last year.
The REIT has an initial portfolio of 14 million square feet (msf) with the call option to acquire another 8.3 msf and rights of first offer on an additional 6.7 msf, both currently owned by members of the Brookfield Group.
Of the initial portfolio of 14 msf, the REIT has 9.8 msf of completed area, while 0.6 msf is under-construction and 3.6 msf is development potential.
Some of the tenants from the initial portfolio include multinational companies such as Barclays, Bank of America Continuum, RBS, Accenture, Tata Consultancy Services and Cognizant.
The REIT vehicle clocked a consolidated net profit of Rs 15 crore for 2019-20 on revenue from operations of Rs 9,56.7 crore.