According to an analyst, there is a widespread belief that the grey market demand suggests a promising listing of approximately 4-5 percent above the issue price of Rs 100. Once the company’s shares are listed, it is anticipated that there will be increased demand and trading activity, driven by the lower allotment ratio for the entire investor category participating in the initial public offering (IPO).
Nexus Select Trust REIT, a real estate investment trust, is poised to make its debut on the stock exchanges on May 19. Market expectations suggest that the REIT will likely command a single-digit premium due to several positive factors. These include the strong response to its recent initial public offering (IPO), a robust business model, a diverse and high-quality asset portfolio, and attractive valuations.
Notably, Nexus Select Trust REIT will become the first retail-focused REIT to be listed on both the BSE and the NSE. Previous REIT listings in India have primarily focused on business and office properties, such as Embassy Office Parks, Mindspace Business Parks, and Brookfield India Real Estate Trust.
As the owner of India’s leading consumption center platform, Nexus Select Trust REIT possesses high-quality assets that serve as essential consumption infrastructure for the country’s growing middle class. The IPO, valued at Rs 3,200 crore, has received a healthy response from investors. Bids have been received for over 101 crore units, surpassing the IPO size of 18.52 crore units by a subscription ratio of 5.45 times. The strong investor interest has been evident across all investor categories, with institutional investors subscribing 4.81 times and non-institutional investors securing 6.23 times their allocated quota.
The IPO for this Blackstone-backed REIT consists of a fresh issuance of units worth Rs 1,400 crore and an offer for sale worth Rs 1,800 crore by existing unit holders. The overall market sentiment suggests a positive outlook for Nexus Select Trust REIT’s listing and its potential to deliver favorable returns to investors.
Prashanth Tapse, Senior VP Research at Mehta Equities, has hailed the tremendous investor response, surpassing five times the subscription, as a remarkable achievement for India’s inaugural retail assets-led REIT, amidst a highly volatile market.
Tapse expressed confidence in the positive outlook for the REIT’s listing, citing indications from the grey market demand that suggest a potential listing premium of approximately 4-5 percent above the issue price of Rs 100. He further speculated that the stock may witness heightened demand and trading volumes post-listing, primarily due to the lower allotment ratio applicable to the entire IPO investor category.
The success of the REIT’s IPO, combined with the optimistic forecasts from market experts, points towards a promising future for this retail assets-focused REIT, setting a solid foundation for potential growth and attractive returns for investors.
