India’s largest REIT IPO: Blackstone, Sattva Group JV files DRHP to raise ₹6,200 crore

Private equity firm Blackstone and Bengaluru-based real estate company Sattva Developers Pvt. Ltd have filed draft papers with the Securities and Exchange Board of India (Sebi) on Thursday, March 5, to raise up to ₹6,200 crore through an initial public offering (IPO) for its joint venture Knowledge Realty Trust.

Knowledge Realty Trust is an upcoming real estate investment trust (REIT) with Blackstone and Sattva as its sponsors. Blackstone will own a 55% stake in Knowledge Realty Trust, with the remaining 45% to be held by Sattva Developers.

Upon listing, Knowledge Realty Trust is said to become the largest REIT in India, with assets of Sattva and Blackstone’s Nucleus Office Parks that combine to make a total leasable area of 48 million square feet as of September 30, 2024.

It will also be the fifth major listed REIT in India after Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Nexus Select Trust which collectively manage a portfolio spanning over 126 million square feet of Grade A office and retail space across the country.

REIT is a company that owns and operates income-generating real estate assets. Like mutual funds, REITs also pool capital from investors to invest in commercial properties. In return, investors receive Income in the form of dividend and interest at regular intervals.

According to the draft red herring prospectus (DRHP), KFin Technologies has been appointed as the registrar for the Knowledge Realty Trust IPO. Kotak Mahindra Capital Co., Axis Capital Ltd, BofA Securities India Ltd, ICICI Securities Ltd, IIFL Capital Services Ltd, JM Financial Ltd, Morgan Stanley India Co. and SBI Capital Markets Ltd are the lead bankers for the offer.

The DRHP reveals that the Knowledge Realty Trust REIT IPO is going to be a book-built issue. The price band is yet to be decided and shall be disclosed at least two working days prior to the bid/issue opening date. The units are to be listed on the BSE and the National Stock Exchange of India (NSE).

The exact dates of the opening of the IPO have not been indicated yet.

According to the DRHP, the net proceeds from the IPO will be utilised for partial or full repayment or prepayment of certain financial indebtedness of the asset special purpose vehicles (SPVs) and the investment entities, as well as for general purposes.

About Knowledge Realty Trust

Knowledge Realty Trust was set up on October 10, 2024, in Mumbai. According to the DRHP, it is the largest REIT in India by net operating income and gross asset value and the second largest in Asia by leasable area.

It has a portfolio that includes 48 million sq. ft. (37 million sq. ft. completed) across 30 Grade A office assets in 6 cities, making it India’s most geographically diverse Office REIT. Almost 95% of the value is concentrated in the top 3 office markets of India: Bengaluru, Hyderabad, and Mumbai.

On Friday, Knowledge Realty Trust reported that it posted a net operating income of ₹1,632.38 crore in the first half of the current financial year 2024-25, while its asset value stood at nearly ₹60,000 crore at September-end.