Knowledge Realty Trust REIT: A Landmark IPO in India’s Real Estate Sector

The Knowledge Realty Trust REIT, co-sponsored by the Sattva Group and Blackstone, has made headlines by achieving a remarkable milestone in the Indian financial landscape. With over 13 times subscription on the final day of bidding, it has emerged as India’s largest and most subscribed Real Estate Investment Trust (REIT) IPO to date. This unprecedented demand reflects not only investor confidence but also the growing maturity of the REIT market in India.

Subscription Details

The public issue of Knowledge Realty Trust REIT saw an overwhelming response, with bids for approximately 2,595.23 crore shares against the 20.84 crore equity shares on offer. The price band for the offer was set between ₹95 and ₹100 per share. At the upper end of the price band, the issue was subscribed 13.11 times overall, with institutional investors contributing 9.55 times and retail investors subscribing 17.38 times. Even at the lower end, the subscription stood at an impressive 12.45 times, showcasing a robust interest from both institutional and retail segments.

A Testament to Investor Confidence

Shirish Godbole, the Chief Executive Officer of Knowledge Realty Trust REIT, emphasized the significance of this milestone, stating, “REITs in India have truly come of age — evolving from a novel concept to a trusted, mainstream investment vehicle.” The growing participation from both institutional and retail investors underscores the confidence in the asset class and the underlying fundamentals of India’s commercial real estate sector. Godbole believes that REITs offer an ideal blend of stability and growth, marking the beginning of a long-term, value-driven journey for investors.

Record-Breaking Applications

Quaiser Parvez, the Chief Operating Officer of Knowledge Realty Trust REIT, highlighted the magnitude of the response, noting that the total number of applications received for Knowledge REIT surpassed the combined total of all previous Indian REITs. This is not merely a milestone; it is a resounding vote of confidence in REITs as a product that offers stable income and growth opportunities. Parvez pointed out that this reflects a growing conviction in the structural strength of India’s premium office space, which is poised to benefit from the country’s extraordinary growth trajectory.

Institutional Participation

The anchor round of the IPO saw participation from several prominent institutions, including LIC, Tata AIG, Nippon MF, Axis MF, Tata MF, FT MF, Amundi, Wells Capital, PIMCO, SBI Pension, and Jhunjhunwala Trust, among others. Additionally, strategic allocations were made to institutions such as SBI Life, UTI MF, HDFC Life, Kotak Life, and 360 One. This diverse participation from established financial entities further solidifies the credibility and attractiveness of the Knowledge Realty Trust REIT.

Utilization of Proceeds

The proceeds from the IPO, estimated at ₹4,640 crore, are earmarked for various purposes. These include the partial or full repayment or prepayment of certain financial indebtedness of the Asset Special Purpose Vehicles (SPVs) and Investment Entities, along with allocations for general corporate purposes. This strategic financial planning is expected to enhance the operational efficiency and stability of the REIT.

Sponsorship and Management

The Knowledge Realty Trust REIT is co-sponsored by Sattva Developers Private Limited and BREP Asia SG L&T Holding (NQ) Pte. Ltd. The trustee for the issue is Axis Trustee Services Limited, while Knowledge Realty Office Management Services Private Limited (formerly known as Trinity Office Management Services Private Limited) serves as the manager. This robust sponsorship and management structure adds an additional layer of confidence for investors.

Conclusion

The Knowledge Realty Trust REIT’s record-breaking IPO marks a significant turning point in the Indian real estate investment landscape. With strong institutional backing, overwhelming public interest, and a clear strategy for utilizing the proceeds, this REIT is poised to play a pivotal role in shaping the future of commercial real estate in India. As the market continues to evolve, the success of Knowledge Realty Trust REIT serves as a beacon of opportunity for both investors and the broader economy.