Nexus Select Trust raises Rs 1,440 cr from anchor investors; to hit mkt with Rs 3,200 cr REIT IPO on Tuesday

Blackstone-sponsored Nexus Select Trust, which will hit the capital market on Tuesday, has raised Rs 1,440 crore from anchor investors.

Nexus Select Trust will launch India’s first REIT (Real Estate Investment Trust) Initial Public Offer (IPO) backed by rent yielding retail real estate assets. At present, there are three listed REITs on stock exchanges but all are backed by office assets.

The company will hit the capital market on Tuesday to raise up to Rs 3,200 crore through its retail REIT maiden public offer, and this includes fresh issue of units worth up to Rs 1,400 crore and an Offer For Sale (OFS) of up to Rs 1,800 crore.

The company has fixed the price band at Rs 95 per unit to Rs 100 per unit for the proposed issue scheduled to close on May 11.

As per the regulatory filing on Monday, Nexus Select Trust has raised Rs 1,440 crore from anchor investors, which included many mutual fund and insurance companies.

The anchor investors who have been allocated units are — HDFC Mutual Fund (MF), SBI MF, HDFC Life Insurance, SBI Life Insurance, Prusik, Morgan Stanley Asia (Singapore) Pte and Tata Investment Corporation, among others, according to a circular uploaded on the BSE website on Monday.

Nexus Select Trust has a portfolio of 17 operational shopping malls, including Delhi’s premium Select City Walk, across 14 major cities covering a 9.8 million square feet area. It operates two hotels with 354 keys, and also office spaces as part of mixed use development.

There are around 3,000 stores across 17 shopping malls while the number of brands is nearly 1,100. The average rental of its retail portfolio is Rs 123 per square feet per month, with a maximum rent at nearly Rs 500 per square feet at Select City Walk in Saket, South Delhi.  

The company’s total Net Operating Income (NOI) is projected to grow organically by 17 per cent to Rs 1,897.1 crore in 2025-26 from Rs 1,619.8 crore in 2023-24. In the first nine-month of the last fiscal, the NOI stood at about Rs 1,050 crore.

In November last year, Nexus Select Trust filed the Draft Red Herring Prospectus (DRHP) with Sebi to launch its retail REIT public issue.

Earlier, the company had planned to raise up to Rs 4,000 crore from its proposed REIT public issue. It has reduced the size as units are being issued at a discount in the public issue as against the net asset value of Rs 127 per unit.

Post-IPO, the shareholding of Blackstone in Nexus Select Trust will come down to 43 per cent from 60 per cent. Select City Walk promoters stake will reduce slightly to 24.3 per cent from 25 per cent.

REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enables the participation of retail investors.

At present, there are three listed REITs — Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust — on Indian stock exchanges, but all of these are leased office assets.

This will be the third REIT sponsored by Blackstone. It launched India’s first REIT Embassy Office Parks and then Mindspace Business Parks REIT.