Brookfield REIT IPO subscribed 15% on Day 1

The initial public offer (IPO) of Brookfield India Real Estate Trust (REIT) started on a slow note, with only 15 per cent of the issue being subscribed on the first day. The Rs 3,800 crore IPO received bids for 1,15,12,600 shares against the issue size of 7,62,78,200 units, as per the exchange data.

The Brookfield REIT IPO opened for subscription on Wednesday with a price band of Rs 274-275 per unit. The issue is likely to close on Friday. Bids can be made for a minimum lot of 200 units and in multiples of 200 units, which amounts to a minimum application size of Rs 55,000 at the upper end of the price band. The shares are proposed to be listed on BSE and NSE.

The finalisation of basis of allotment for Brookfield India REIT will be done on February 11, 2021, and the allotted shares will be credited in applicants' demat account by February 12, 2021.

The investment firm Brookfield REIT has already raised Rs 1,710 crore from anchor investors ahead of its public issue. The 62,180,800 shares reserved for anchor investors were subscribed at a bid price of Rs 275 per unit. It saw participation from financial institutions such as HDFC AMC, SBI Life, Tata AIG, HDFC Life, Kotak Mahindra AMC, and Bajaj Holdings, among others. Foreign portfolio investors such as Schroders and Prusik also invested.

The company intends to use IPO proceeds for partial or full pre-payment or scheduled repayment of the existing debt of Asset SPVs (special purpose vehicles).

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Brookfield REIT, the country's only 100 per cent institutionally managed public commercial real estate vehicle, will be the third listed trust in India after Mindspace Business Parks REIT and Embassy Office Parks REIT. Embassy Office Parks REIT, backed by Blackstone and Embassy group, was listed in April 2019 after raising Rs 4,750 crore, while Mindspace Business Parks REIT, owned by K Raheja and Blackstone, was listed in August last year amid COVID-19 pandemic after raising Rs 4,500 crore.

With the first two REITs garnering good support from investors, Brookfield REIT is also expected to get positive response. REIT, a popular instrument globally, was introduced in India a few years ago, aimed at attracting investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enable retail participation.

Also Read: Brookfield India REIT to launch Rs 3,800-crore IPO on February 3; check details

In the fiscal year 2020, Brookfield REIT posted a profit of Rs 15.12 crore against a loss of Rs 15.75 crore in a year-ago period. Its total income rose 5.54 per cent from a year ago to Rs 981.40 crore. The company has a total debt of Rs 6,952.07 crore, as of March 2020.  

Multi-national corporations like Barclays, Bank of America Continuum, RBS, TCS, Cognizant, and Accenture are some of the clients of Brookfield India Real Estate Trust. The company has campus-format office parks strategically located in Mumbai, Noida, Gurugram, and Kolkata.

With PTI inputs