image showing real estate industry in India in reference to upcoming Nexus Select Trust REIT IPO
In stark contrast to 2021 and 2022, 2023 has seen very limited IPOs in the first 5 months of the year which shows that companies are treading cautiously in the face of global uncertainty. The newest IPO to come into the market is from the real estate sector and a company that is a first of its kind in India.
Nexus Select Trust REIT IPO will open for subscription on 9th May 2023 and will close on 11th May 2023.
Here are all the essential details of Nexus Select Trust REIT IPO, including investment price band, allotment date, GMP, benefits, risks of investing in this IPO, and more.
The key details of the Nexus Select Trust REIT IPO are as under.
The size of the IPO and different categories of the issue are:
| Category | Details |
| IPO Opening Date | 9th May 2023 |
| IPO Closing Date | 11th May 2023 |
| Listing | NSE, BSE |
| Issue Type | Book Built Issue IPO |
| Face Value of shares | Re. 1 per share |
| IPO Price Band | Rs. 95 – Rs. 100 per share |
| IPO Size | Rs. 3,200 crores |
| Offer For Sale | Rs. 1,800 crores |
| Fresh Issue | Rs. 1,400 crores |
The important dates for the Nexus Select Trust REIT IPO are highlighted below:
| Event | Date |
| Opening date | 9th May 2023 |
| Closing Date | 11th May2023 |
| Allotment date | 16th May 2023 |
| Refund Date | 17th May 2023 |
| Share Credit Date | 18th May 2023 |
| Listing Date | 19th May 2023 |
Investors can subscribe to the shares of Nexus Select Trust REIT IPO in pre-defined lots. The details of the lot sizes for this IPO are mentioned below:
| Category | Details |
| Investments in lots | Minimum – 1 lotMaximum – 13 lots |
| Investment amount | Minimum – Rs. 14,250Maximum – Rs. 1,95,000 |
| Shares | Minimum – 150Maximum – 1950 |
Since there is no ‘retail’ category in this IPO, retail investors can use the NII category to apply for this IPO. Here are the percentage reservation details of each of the categories:
| Category of Investor | Reservation Percentage |
| QIB (Qualified Institutional Buyers) | 75% |
| NII (Non-Institutional Bidders) | 25% |
This IPO is a mix of Offer for Sale and Fresh Issue. The proceeds from the Offer for sale will not be received by the company but the proceeds from the fresh issue will be utilised in the following manner.
Nexus Select Trust REIT owns a top-quality portfolio of assets that are essential consumption infrastructure for India’s growing middle class. This makes them India’s leading consumption centre platform, and have the proud badge to be the first publicly listed consumption centre REIT in the country.
Their portfolio consists of 17 Grade A urban consumption centres, three office assets, and two complementary hotel assets, totaling a leasable area of 9.2 msf and 354 keys, respectively, as of December 31, 2022. These assets are strategically located in 14 leading cities in India with a tenant base of 1,044 domestic and international brands with 2,893 stores and constituting 30% of India’s total discretionary retail spending in FY20.
Furthermore, their portfolio has an average population CAGR that is 226 bps higher than the national average from the financial years 2011 to 2021. Many of their assets are market leaders in their respective submarkets, providing shopping, entertainment, and social destinations for their respective catchments, according to the CBRE report by Completed Area.
Nexus Select Trust REIT financials are given in the table below:
| Year | Total Assets (Rs. In crores) | Operating Revenue (Rs. In crores) | Profit after tax (Rs. In crores) | Investment Property (Rs. In crores) |
| Mar-2022 | 9,090 | 1,318 | (10) | 6,417 |
| Mar-2021 | 8,959 | 907 | (199) | 6,420 |
| Mar-2020 | 9,528 | 1,622 | 207 | 6,600 |
(Source: RHP)
Some of the key strengths of Nexus Select Trust REIT that investors can take note of are:
| Category | Details |
| Business model | The company has the merit of being the leading consumption centre with high-quality assets and is strategically located in prime in-fill locations with high barriers to entry.They have a diverse presence in 14 large cities that essentially drive the consumption in the country with a footfall of 130 million approximately. The company has a high tenant base of domestic and international brands and approximately 1.3 billion in tenant sales. |
| Management team and other assets | Nexus has a fully integrated platform and the backing of a highly skilled management team. They also have the benefit of proprietary insights and access to industry-leading technology initiatives |
Here are some of the risks that investors of Nexus Select Trust REIT IPO should know:
| Category | Details |
| Business viability and profitability | One of the biggest concerns for the company is the high concentration of revenue from a limited number of large tenantsThere has also been a decline in the footfall in their urban consumption centres along with the low occupancy and reduced rent levels not only in their UCCs but also in hotels and commercial space. |
| Other concerns | Other risks include the illiquidity of real estate investments and the weakening real estate sector in the country.There is also the risk of non-renewal of non-replacement, default, early termination, regulatory or legal proceeding that can have a direct impact on its revenues and profitability |
As of May 8th, 2023, the grey market premium for the shares of Nexus Select Trust REIT is approximately Rs. 5 as per market observers.
While there has been a decline in the real estate sector in the country, Indian REITs have performed significantly better than their US counterparts by delivering an IRR of 13.4% approximately which is higher than the latter by 2662 bps. It is also viewed that there will be a continuing demand for Grade A retail assets which will be beneficial for the company as it is dominant in this segment. Although there was a dip in its revenues and profit after tax in the past years, there has also been an uptick in the same showing the potential for further growth backed by the increased overall consumption in Indian markets. Therefore, investors can consider this IPO with a medium to long-term investment horizon as well as a source of diversification for their investment portfolio.
Investors can invest in this IPO through the Fisdom app.
Nexus Select Trust has its presence in 14 cities in India (including Delhi, Navi Mumbai, Bengaluru, Pune, Hyderabad, and Chennai) and constituted approximately 30% of India’s total discretionary retail spending in FY20.
A REIT (Real Estate Investment Trust) is a company that owns and manages income-producing real estate, like apartments or shopping centres. When investors buy shares, they own a portion of the real estate portfolio and receive dividends from the rental income. REITs distribute most of their taxable income to shareholders, making them a good option for those seeking regular income. Investing in a REIT can also offer diversification as assets are spread across different properties and locations.
95.5% of the tenant leases of Nexus Select Trust REITS provide for the Minimum Guaranteed Rental as of December 2022 and they have rent escalation clauses with a typical increase of approximately 12% to 15% over a period of 3-5 years.
Yes, to apply for any IPO, you need to have a Demat account. To open a Demat account today, you can download the Fisdom app on your smartphone.
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