Bagmane Prime Office REIT IPO subscribed 71% on day 1

The initial public offering (IPO) of Blackstone-backed Bagmane Prime Office REIT received a 71 percent subscription on the first day of bidding on Tuesday.

The IPO received bids for 10,55,39,250 units against 14,79,21,000 units on offer, as per NSE data.

The category for other investors fetched 74 percent subscription, while the portion for institutional investors got subscribed 69 percent.

Bagmane Prime Office REIT has secured about Rs 1,150 crore from anchor investors.

The Rs 3,405-crore public issue will conclude on May 7.

The price band has been fixed at Rs 95-100 per unit for the public issue of Bengaluru-based real estate investment trust (REIT), which owns and develops Grade A+ office assets.

The IPO has a fresh issue of units aggregating up to Rs 2,390 crore and an offer for sale (OFS) of units worth up to Rs 1,015 crore by the selling unitholder.

Proceeds will be used to acquire Luxor at Bagmane Capital Tech Park (spanning one million sq ft) as well as part-fund the acquisition of a 93 percent stake in Bagmane Rio, which owns the 1.1 million sq ft Bagmane Rio Business Park.

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Bagmane Prime Office REIT's portfolio includes six premium Grade A+ business parks spanning 20.3 million square feet, located in key micro-markets of Bengaluru, including the Outer Ring Road (ORR) and the Secondary Business District (SBD City).

Real Estate Investment Trusts (REITs) are investment vehicles that own or operate income-generating real estate, enabling investors to earn a share of the income produced without directly purchasing the properties.

At present, there are five listed REITs in India-Sattva Group and Blackstone-backed Knowledge Realty Trust (KRT), K Raheja Corp-backed Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Embassy Office Parks REIT and Nexus Select Trust.

Of the five listed REITs, only Nexus Select Trust is backed by rent-yielding retail real estate (shopping malls) while the other four are office REITs.

The book-running lead managers to the issue are JM Financial, Kotak Mahindra Capital Company, Axis Capital, IIFL Capital Services, SBI Capital Markets, 360 ONE WAM and HDFC Bank.