Brookfield India REIT

IPO Size

`3800 Cr

Price Band

`274-275 Per Share

Minimum Lot Size

200 Share

Face Value

`10 Per Share

Employee Discount

NA

Retail Allocation

35%

Issue Open Date

03 Feb 21

Issue Close Date

05 Feb 21

Listing Date

17 Feb 21

About the Company:

Brookfield India Real Estate Trust is India’s only institutionally managed public commercial real estate vehicle. The real estate trust is sponsored by an affiliate of Brookfield Asset Management, one of the world’s largest alternative asset managers having an approximately US$575 billion in assets under management, as of September 30, 2020. The goal of the trust is to be the leading owner of high quality income producing commercial real estate assets in key gateway Indian markets, which have significant barriers to entry. The vision of the trust is to address this demand by owning and operating large “fully-integrated”, “campus style” office parks in established locations, and providing a complete ecosystem to our tenants and their employees. The initial portfolio of the trust comprises 1.4 crore square feet (csf), having rights to acquire a further 0.83 csf and rights of first offer on an additional 0.67 csf, both currently owned by members of the Brookfield Group.

Outstanding Litigation:

S.No. 1 - Company 2 - Directors 3 - Promoters
Entity Name By the Company Against the Company By the Sponser Group Against the Sponsor Group By the Sponser Against the Sponser
Criminal cases - - - - - -
Material civil cases - 98.14 - - - 3.65
Taxation matters - - - - - -
Regulatory Procedings - - - - - -
Amt. (In Million Rs.) - 98.14 - - - 3.65

Financial Statements:

Income Statement (In Millions) FY20 FY19 FY18
Gross Operating Income 9813.95 9298.3 8662.51
Cost of Employee & Inventory 303.2 190.6 328.14
Other Expenses 3327.52 3205.95 2452.46
EBITDA 6183.23 5901.75 5881.91
Depreciation 1122.61 957.11 903.01
Interest  7141.32 4403.59 3287.17
Profit Before Tax -2080.7 541.05 1691.73
Exceptional Items 2495.01 - 43.4
 Tax 263.09 698.5 124.29
Profit After Tax 151.22 -157.45 1610.84

Recommendation

As per CA Ajay Chouhan, SEBI Registered Research Analyst, recommendation is to ‘Subscribe’ for ‘Long Term’. Backed by an affiliate of Brookfield Asset Management, the Brookfield Real Estate Trust is India’s only institutionally managed commercial real estate Special Purpose Vehicle. The trust is operating in a filthy environment, which is not a highly promising one due to rising Work from Home (WFH) facility. Despite the fact that many corporations and firms have started working from offices with low capacity; cash flows are not expected to grow sharp. On the financials front, the revenue from direct operations is increasing at a CAGR of 7.90%. EBITDA margins are increased by 4.7%. Finance cost has been doubled in last two years but it will dilute in upcoming years as net proceeds will be deployed into payment for SPVs. At a price of Rs. 275, the Brookfield trust is offering the IPO at a discount as its NAV stands at Rs. 311. While, its peers Embassy office Park REIT and Mindspace Business Park REIT are trading at a discount of 5.3 percent and 3.0 percent respectively of its NAV per unit, which shows comfort in the valuations of the Brookfield REIT.

Promoter of the Company

The promoter of the company is BSREP India Office Holdings V Pte. Ltd.

Peer Comparison

In the listed space, the company will face tough competition from Embassy Office Park REIT and Blackstone Group-backed Mindspace Business Parks REIT which were listed in 2019 and 2020 respectively.

Objectives of the Issue

Offer for Sale

There is no Offer For sale. The company is completing drawings fresh proceeds from the equity markets.

Fresh Issue

The company has planned to raise fresh capital comprising an aggregate of 13,81,818 equity shares having Face Value ₹10 aggregating up to Rs. 3,800 Cr at the upper price band of Rs. 275. The net proceeds will be utilized for scheduled repayment or pre-payment of the existing indebtedness of asset SPVs (Special Purpose Vehicles).