Mindspace REIT plans to raise $599 million through IPO to pay debt

The real estate investment trust will offer about Rs 1,000 crore of new shares while the founders will offer the remaining

Mindspace Business Parks REIT, an Indian operator of office complexes backed by Blackstone Group, plans to raise as much as Rs 4,500 crore ($599 million) in an initial public offering and use the proceeds to pay debt.

The real estate investment trust, which also counts K Raheja Corp, a Mumbai-based real estate developer, as a sponsor, will offer about Rs 1,000 crore of new shares while the founders will offer the remaining, according to a draft prospectus filed with India’s securities regulator.

India’s S&P BSE Sensex index has jumped about 40 per cent since Prime Minister Narendra Modi first ordered people to shelter at home in March. That’s attracting companies to tap the market to raise funds. Mindspace will be the second REIT to sell shares.

Embassy Office Parks REIT, India’s first REIT IPO, was able to “deliver the returns,” said Mohit Agrawal, an analyst at Mumbai-based IIFL Securities . “Mindspace has a portfolio of well diversified assets in major urban centers. The expected yield could be around 7-7.5 per cent.”

Mindspace Business Park’s portfolio comprises 23 million square feet of completed area and 2.8 million square feet of under construction, across Mumbai, Hyderabad, Pune and Chennai.

The company counts Accenture, JPMorgan Chase & Co and Amazon.com, among its clients.