Knowledge Realty Trust REIT IPO subscribed 1.2 times on Day 1

The initial share sale of Knowledge Realty Trust, sponsored by realty firm Sattva Group and Blackstone, got fully subscribed on the first day of bidding on Tuesday and ended the day with 1.20 times subscription.

The Rs 4,800-crore REIT initial public offering (IPO) received bids for 25,04,91,300 units against 20,84,20,800 units on offer, translating into 1.20 times subscription, as per NSE data.

Institutional Investors category received 75 per cent subscription while other investors (such as corporates, and individuals investors/NRI and HUF) category was subscribed 1.75 times, as per the NSE data.

Knowledge Realty Trust on Monday said it had garnered Rs 1,620 crore from anchor investors, including those from Amundi, Wells Capital, Jhunjhunwala Trust. Additionally, the company received a strategic allocation of Rs 1,200 crore from institutional investors.

The IPO will conclude on August 7. The company has set a price band of Rs 95 to Rs 100 per unit.

This IPO is entirely a fresh issuance of units by Knowledge Realty Trust.

In early March, KRT filed the draft red herring prospectus (DRHP) with Sebi to launch an IPO and list the REIT on stock exchanges. This is part of a strategy to monetise its 30 prime office assets across major cities.

Initially, the company planned to raise a total of Rs 6,200 through a public issue. In June, it raised Rs 1,400 crore from investors.

Accordingly, the issue size has been reduced to Rs 4,800 crore.

KRT is set to become India's largest REIT by gross asset value (around Rs 62,000 crore). Its net operating income stood at Rs 3,432 crore in the previous financial year.

KRT owns over 46 million sq ft of office assets across 29 assets in six cities, primarily Mumbai, Bengaluru, and Hyderabad.

The assets include One BKC and One World Center in Mumbai, Knowledge City, and Knowledge Park in Hyderabad and Cessna Business Park and Sattva Softzone in Bengaluru.

Blackstone and Sattva will continue to own about 80 per cent of the REIT.

At present, there are four listed REITs (real estate investment trusts) in India -- Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust.

Apart from Nexus Select Trust, the other three REITs are backed by rent-yielding office assets. Nexus owns a large portfolio of retail real estate spaces.

Bengaluru-based Sattva Developers has so far constructed 74 million sq ft across seven Indian cities in commercial, residential, co-living, co-working, hospitality, and data centre sectors.

An additional 75 million sq ft is in the planning and implementation stage.

Blackstone, one of the leading global investment firms, has a huge exposure in the Indian real estate market.

The two sponsors have decided to adopt a brand-neutral strategy to grow the KRT portfolio inorganically through third-party acquisitions.

The existing four REITs have a combined portfolio of over 126 million sq ft of Grade A office and retail space across the country.

Since their inception, these REITs have collectively distributed over Rs 21,000 crore to unitholders.