Nexus Select Trust REIT IPO subscribed 2.2 times on final day

The initial public offering (IPO) of India's first pure-play retail REIT Nexus Select Trust has received bids for 37.2 crore units against the issue size of 18.52 crore units on the final day of bidding.

The overall issue has been subscribed 2.1 times by 2.30 pm today. Of the entire issue, HNIs or high net worth individuals (HNIs) quota was subscribed 2.3 times, while QIBs or qualified institutional buyers' issue was subscribed 2 times. The company had reserved up to 75% of the offer for QIB and the remaining 25% for HNI.

The Blackstone-backed Nexus Select Trust REIT is eying to raise ₹3,200 crore through the public issue, which opened for subscription on May 9.

The IPO offer constitutes a fresh issue of shares worth ₹1,400 crore and an offer for sale (OFS) of up to ₹1,800 crore. The bidding for anchor investors opened on May 8 and the issue garned ₹1,440 crore via the anchor book.

The stock will make its debut on domestic exchanges on May 15. Nexus Select Trust had fixed a band price of ₹95-100 per share for its IPO set to take place between May 9-11.

The real estate investment trust, which owns and operates high-quality shopping malls and other retail properties in India, had cut the overall issue size to ₹3,200 crore from ₹4,000 crore proposed last year.

The IPO will see major sponsor Blackstone and some other smaller holders partially diluting their stakes in Nexus via the OFS route. The net proceeds from the fresh issue of equity shares will be utilised towards repayments of debts, acquisition of stake, redemption of debt securities in certain special purpose vehicles (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.

This would be the fourth REIT to make its debut on the Indian stock exchanges and the first in retail space as all three listed REITs - Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust - are leased office assets.

The REIT is an investment instrument that was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets. It offers proportionate ownership of an income-generating real estate asset to retail investors.

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.