The first pure-play retail Real Estate Investment Trust (REIT) in India, Nexus Select Trust, which recently made its debut on domestic bourses, on Friday said it has successfully raised ₹1,000 crore of coupon-bearing non-convertible debentures (NCDs). The Blackstone-backed REIT (Real Estate Investment Trust) intends to use debt capital to refinance bank loans at Special Purpose Vehicle (SPV) level. The NCDs will be listed on the wholesale debt market of BSE Limited.
“Through this refinance, Nexus Select Trust will be able to secure upto 60 basis points interest savings, compared to the existing interest rate,” it said in a BSE filing today.
The ratings agencies CRISIL and ICRA have assigned “AAA (Stable)” rating to these NCDs, which will be issued in two tranches. As per the exchange filing, in the first tranche, the trust will issue NCDs worth ₹700 crore at a coupon rate of 7.86% per annum payable quarterly for a tenure of 3 years. In the second tranche, it will issue NCDs worth ₹300 crore at 8% per annum payable quarterly for a tenure of 5 years.
RRajesh Deo, Chief Financial Officer at Nexus Select Trust, said, “We are pleased to announce the closing of this fund raise of ₹1,000 crore, which has seen strong participation from institutional investors. Our AAA (Stable) rated balance sheet and industry-leading creditworthiness continues to attract capital from Mutual Funds, Insurers, and Corporates. This NCD issuance, priced at 7.90%, enables us to partly refinance floating rate loans prudently.”
Axis Bank, Kotak Bank, and SBI Capital Markets served as arrangers on the private placement and Trilegal served as the transaction counsel to the issuance.
Nexus Select Trust, the country’s first pure-play retail REIT, made its debut on the domestic stock exchanges on May 19 after successfully raising ₹3,200 crore via initial public offering (IPO), which opened between May 9-11. The IPO comprised fresh issue of units up to ₹1,400 crore and an offer for sale (OFS) of up to ₹1,800 crore.
As per the document filed with SEBI, the REIT intends to use net proceeds raised from the issue of fresh units towards repayments of debts, acquisition of stake, redemption of debt securities in certain SPV, as well as to meet general corporate purposes. As of June 2022, Nexus had debt of ₹4,500 crore, which is likely to come down to ₹3,600 crore post fundraising.
With an enterprise value of ₹23,000 crore, Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, including Select Citywalk Mall in South Delhi, with a total leasable area of 9.2 square feet (msf), two complementary hotel assets (354 keys), and three office assets (1.3 msf) as of December 31, 2022. The company’s business portfolio includes assets that are mixed-use in nature with complementary hotels and office spaces like Hyatt Regency Chandigarh and Oakwood Residence Whitefield Bangalore (together constituting 2.8% of its gross portfolio market value as of June 30, 2022), which are managed by global hotel operators, Hyatt and Oakwood.
This was Blackstone’s third REIT listing on the domestic bourses after Embassy Office Parks and Mindspace Business Parks. The American private equity firm launched India's first REIT Embassy Office Parks in April 2019 after raising about ₹4,750 crore through a public issue. Mindspace Business Parks was the second REIT that was listed in August 2022 following fundraising of ₹4,500 crore via the IPO route.
(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)
