Nexus Select Trust’s ₹3,200 Crore IPO Subscribed 5.7x: India’s First Retail Assets-led REIT

Nexus Select Trust IPO subscribed 5.7x

Introduction:
In a remarkable feat, Nexus Select Trust, a Real Estate Investment Trust (REIT) backed by The Blackstone Group, has successfully concluded its ₹3,200-crore Initial Public Offering (IPO) for India’s first-ever retail assets-led REIT. The IPO received an overwhelming response, with a total subscription of 5.74 times, reflecting the growing acceptance of yield products in the country’s market. This blog post explores the key highlights of Nexus Select Trust’s IPO and its significance in the volatile market.

The REIT is planning to distribute 100% of its net distributable cash flow with close to 60% of it in the form of dividends. This is US private equity major Blackstone’s third REIT in the Country, including both earlier trusts that housed office properties. Embassy REIT, backed by an institutional investor, was India’s first REIT and made its public market debut in 209, while Mindspace REIT listed in 2021.

Subscription Details:
Nexus Select Trust’s IPO garnered over 155,000 applications, highlighting the immense interest from retail and institutional investors. The institutional investor portion was subscribed 5.06 times, while the other investor portion witnessed a robust subscription of 6.55 times at the upper end of the price band, which was set between ₹95-100 per unit. Such strong subscription figures reinforce the strength of the Nexus platform and its potential to attract investors seeking attractive yields.

Notable Participants:
The IPO of Nexus Select Trust was facilitated by renowned banking institutions, including Morgan Stanley, JP Morgan, Kotak Mahindra Capital, Axis Capital, and BoA ML. These reputable entities played instrumental roles in ensuring a smooth and successful public issue for the REIT.

Diverse Asset Portfolio:
Nexus Select Trust boasts the country’s largest mall platform, comprising 17 strategically located assets across 14 key cities in India. These assets are situated in dense residential catchments and encompass prominent locations like Select Citywalk in Delhi, Nexus Seawoods in Navi Mumbai, Nexus Koramangala in Bengaluru, Nexus Elante in Chandigarh, and Nexus Ahmedabad One in Ahmedabad, among others. The extensive and diversified asset portfolio positions Nexus Select Trust as a leading player in the Indian retail real estate sector.

Distribution Policy:
The REIT’s distribution policy is geared towards maximizing investor returns. Nexus Select Trust plans to distribute 100% of its net distributable cash flow, with nearly 60% allocated in the form of dividends. This commitment to distributing significant dividends reflects the REIT’s focus on generating consistent income for its investors.

Blackstone’s REIT Ventures:
For US private equity major Blackstone, Nexus Select Trust marks its third REIT venture in India. Blackstone has previously launched two other REITs that primarily consisted of office properties. The success of Embassy REIT, the first REIT in India backed by institutional investors, and the subsequent listing of Mindspace REIT in 2021 further solidify Blackstone’s strong presence in the Indian REIT market.

Conclusion:
Nexus Select Trust’s IPO has undoubtedly made a significant impact on the Indian real estate investment landscape. The overwhelming subscription figures reflect the trust’s appeal to both retail and institutional investors, further demonstrating the increasing acceptance of yield-based products in India. With its extensive mall platform and commitment to distributing substantial dividends, Nexus Select Trust is poised to deliver attractive returns to its investors. This IPO success sets a promising precedent for future REIT offerings and underlines the potential for growth and innovation in India’s real estate sector.

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