Global investment firm Blackstone-sponsored Nexus Select Trust has announced the price band for its initial public offering (IPO) at Rs 95-100 per share. This IPO marks the country’s first Real Estate Investment Trust (REIT) and will be open for subscription from May 9 to May 11. This will be Blackstone’s third sponsored REIT. The offer document states that the total size of the public issue is Rs 3,200 crore, with a fresh issue of units worth up to Rs 1,400 crore and an offer for sale (OFS) of up to Rs 1,800 crore.

Nexus Select Mall CFO Rajesh Deo revealed that the company’s net debt is Rs 3,600 crore. The capital raised through the IPO will be used to pay Rs 1,050 crore towards debt, Rs 27 crore for acquiring a 27% stake in Treasure Island, and the remainder for corporate expenses. Deo also stated that the company’s total income for the first nine months of 2022-23 was Rs 1,498.35 crore, and they project a 17% growth in net income by 2025-26.

Nexus Select Mall Management CEO Dalip Sehgal expressed enthusiasm for the IPO, stating that Nexus Select Trust is India’s largest retail platform and well-positioned to take advantage of India’s unique consumption trends. Sehgal emphasized their commitment to being at the forefront of India’s retail journey. Nexus Select Trust currently holds a portfolio of 17 operational shopping malls spread across 14 major cities, with a total area of 9.8 million square feet.

The book running lead managers for the IPO include BofA Securities India, Axis Capital Limited, Citigroup Global Markets India, HSBC Securities and Capital Markets (India), IIFL Securities, JM Financial, JP Morgan India, Kotak Mahindra Capital Company, Morgan Stanley India Company, and SBI Capital Markets.

REITs, a popular investment instrument globally, were introduced in India a few years ago to attract investment in the real estate sector by monetizing rent-yielding assets. This allows for the unlocking of the vast value of real estate assets and enables participation from retail investors.

Currently, there are three listed REITs on Indian stock exchanges – Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust. However, all of these listed REITs are centered around leased office assets.