Mindspace Business Parks REIT initial public offering (IPO) was received with open hands by investors, subscribing the issue 12.96 times at the end of bidding on Wednesday. The real estate investment trusts IPO opened for subscription on July 27 and closed on July 29. Mindspace aimed to raise Rs 4,500 crore from the issue, which included a fresh issuance of Rs 1,000 crore and an offer for sale for Rs 3,500 crore. Mindspace Business Parks REIT is jointly owned by K Raheja Corp and private equity firm Blackstone.
Of the 6,77,46,400 units up for bidding bids were received for 87,78,24,600 units when the issue closed. Institutional investors oversubscribed their portion 9.61 times as the bid for 39,21,21,600 units in total. Of these, foreign Institutional Investors bid for 24,59,66,800 units, while domestic institutional investors and mutual funds bid for almost 2 crore units each. Apart from institutions, other investors oversubscribed the issue 14.77 times. Corporations bid for 14,72,03,800 units and HUFs were seen bidding for 28,29,68,800 units.
“This positive response to the REIT will help build further confidence amongst global investors and attract them for long term commitment to the market. This is especially heartening, in the current scenario where the overall economy is going through an unsettling period,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India. The success of the IPO comes at a time when outlook for the real estate sector has been grim as the economy takes a hit. Mindspace Business Parks REIT was the second REIT to ever enter the Indian market.
Mindspace Business Parks REIT has received Rs 1,518 crore from 54 anchor investors. Some of the marquee anchor investors include the Government of Singapore, Cohen and Steers Global, HSBC, Fidelity, Nomura, Morgan Stanley, SBI Life Insurance, and HDFC Life Insurance. REITs form an attractive investment option for long-term investors as REITs have to pay out at least 90% of their net distributable cash flows to stockholders as dividend.