Bagmane REIT Set for Debut in Test for India’s IPO Market

(Bloomberg) -- Blackstone Inc.-backed Bagmane Prime Office REIT is set to start trading in Mumbai on Thursday after raising $360 million in an initial public offering, a debut that will offer cues on investor appetite and the outlook for India’s equity capital markets.

The REIT raised 34.05 billion rupees at 100 rupees per unit. The IPO included fresh issue of 23.90 billion rupees and an offer-for-sale of 10.15 billion rupees by Blackstone. The offering was subscribed 23 times, with retail investors bidding about six times the units on offer, underscoring strong demand for yield-generating assets. The Bengaluru-based developer is commanding a gray market premium of about 5%, according to IPOWatch, signaling cautious optimism ahead of the debut.

A strong listing could encourage more real estate investment trusts to tap public markets and provide a lift to India’s broader IPO pipeline, which has slowed over the past two months as stocks turned more volatile. Investor interest has been supported by relatively strong returns from listed REITs, which have delivered yields of 15% to 26% over the past year, outperforming the benchmark Nifty index, which posted negative 3.5% returns over the same period, according to Bloomberg-compiled data.

“REITs in India have been gaining traction, supported by stable cash flows from long-term commercial leases and their ability to deliver regular income distributions,” said Dharmesh Mehta, managing director and CEO of DAM Capital Advisors Ltd. “This makes them attractive to investors seeking predictable returns during periods of uncertainty.”

Bagmane will be the sixth listed REIT in India, joining Knowledge Realty Trust, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Embassy Office Parks REIT and Nexus Select Trust.