A joint venture between Blackstone, a US-based private equity firm, and Sattva Group, a prominent real estate developer from Bengaluru, has filed a draft red herring prospectus (DRHP) on Thursday for what is said to be India’s largest Real Estate Investment Trust (REIT) IPO. The REIT named Knowledge Realty Trust aims to raise approximately Rs. 6,200 crore (around $712.55 million) through its initial public offering.
Knowledge Realty Trust REIT IPO
Knowledge Realty Trust will be the largest in India in terms of net operating income (NOI) and gross assets value (GAV). The trust has a gross asset value of nearly Rs. 60,000 crores, and the DRHP does not specify an exact listing date, according to sources. The joint venture, Knowledge Realty Trust, is 55 percent owned by Blackstone, with Sattva Group holding the remaining 45 percent stake, as detailed in the prospectus.
Once listed, Knowledge Realty Trust will become India’s fifth publicly traded REIT and will boast a total leasable space of 48 million square feet, making it the second-largest REIT in Asia in terms of size. The listing is managed by prominent bookrunners, including Bank of America and Morgan Stanley.
From the total issue size of Rs. 6,200 crores, Rs. 5,800 crores will be used for the partial or full repayment of outstanding debts, which are primarily tied with some asset special purpose vehicles (SPVs) and investment entities within the portfolio. As of 30th September 2024, the total debt across these entities amounts to Rs. 20,197 crore, with Rs. 19,901 crore attributed to the total amount of outstanding loans from banks and non-banking financial companies (NBFCs).
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Blackstone REIT IPO Overview
Blackstone’s global real estate portfolio was valued at approximately $602 billion as of September 2024. This will be Blackstone’s fourth REIT IPO in India. The company first entered the Indian REIT market in 2019 with the Embassy Office Parks REIT, raising Rs. 4,750 crore. It followed up with the Mindspace Business Parks REIT in 2020, which raised Rs. 4,500 crore. Brookfield REIT and Nexus Select Trust also tapped the market in 2021 and 2023, raising Rs. 3,800 crore and Rs. 3,200 crore, respectively.
Notably, Blackstone exited its $833 million investment in Embassy Office Parks in December 2023, which was India’s first publicly listed REIT. The 95 percent of assets under the current REIT are predominantly concentrated in India’s top office markets: Mumbai, Bengaluru, and Hyderabad, while around 90 percent of the REIT’s portfolio is leased, with 76 percent of its tenants being multinational corporations.
Written by Shivani Singh
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