IPO listed on 19 May'23
Nexus Select Trust REIT
Minimum Investment
₹ 15,000 / 150 shares
Grey market premium
₹ 4 (4% premium)
Issue price
₹ 100
Listing price
₹ 102
Listing gains
2 (2%)
Listing on
May 19, 2023
Our Verdict:
Neutral
- Nexus Select Trust, India's first retail assets-led Real Estate Investment Trust (REIT), boasts a diverse mix of tenants across multiple sectors such as apparel and accessories, hypermarket, entertainment, food and beverages.
- Overall, the REIT’s valuation appears to be reasonable, making it an attractive investment opportunity for long-term investors seeking alternatives to fixed income instruments that offer regular payouts while also managing some yield volatility risks.
- The REIT is expected to generate returns of ~8% (pre-tax) and ~7% (post-tax), which is good considering the low risk (AAA rating by CRISIL, ICRA) and yields offered by other players.
- Investors seeking quick listing gains or price appreciation and not dividend income may skip this issue. However, long-term investors looking for a stable source of income with decent returns can consider investing in Nexus Select Trust’s REIT IPO.
About the company
Founded in
10 Aug'22
Managing director
Dalip Sehgal
- Nexus Select Trust is India’s largest retail platform comprising 17 high-quality assets, strategically located in densely populated residential catchments across 14 prominent cities.
- Its assets, which include 17 prime urban consumption centres (malls) encompassing a total leasable area of 9.2 msf, 2 complementary hotel assets (354 keys) and 3 office assets (1.3 msf), are ~96% leased.
STRENGTHS
- First publicly listed consumption center REIT in India, offering investors an opportunity to invest in a diversified mix of assets
- Sponsored by Blackstone Real Estate Fund, which has a global AUM of $326 bn and 15 years of operating experience in India
- Highly occupied by a diversified tenant base of renowned national and international brands
- Well-positioned for strong organic growth through contractual rent escalations, higher tenant sales, re-leasing at higher market rents and leasing up of vacant areas
RISK FACTORS
- Nexus Select intends to obtain external debt financing to repay debt and fund business requirements, which could negatively affect cash flows. Additionally, failure to service debt could impact unit holder distributions.
- Heavy dependence on a few large tenants: Any adverse conditions affecting these tenants, properties or markets could harm the business.
Issue details
Issue type
Mainstream
Issue size
₹ 3,200 crore
Fresh Issue
₹ 1,400 crore
OFS
₹ 1,800 crore
Price range
₹ 95 - 100
Lot size
150 shares
Issue Objective
The Trust will not receive any proceeds from the OFS portion. The net proceeds from the Fresh Issue will be utilised towards the following objects:
- Repayment or prepayment and redemption of certain financial indebtedness of the Asset SPVs and the Investment Entity
- Acquisition of stake and redemption of debt securities in certain Asset SPVs
- General purposes
Dates
Bidding open
9 May'23
Bidding close
11 May'23
Allotment date
16 May'23
Refund date
17 May'23
Listing
19 May'23
IPO Reservations
Qualified institutional buyers
< 75%
Non-institutional investors
> 25%
Retail individual investors
-
Read the Offer Document
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