Brookfield India Real Estate Trust (REIT) IPO belongs to the real estate sector. The company is managed by an institution. It is a public commercial real estate company having a partnership with BAM (Brookfield Asset Management). The company’s offices are located in the major cities of India. They are Mumbai, Delhi, Kolkata and Gurugram. Among the properties that this company established, the rate of occupancy is close to 94%. The company’s overseas client list has some of the giants like Bank of America, Cognizant, etc.
From a domestic point of view, the company’s main office is in Gurugram. The company is 120 years old and has more than 575 million dollars worth of asset management base. The company has its business in more than 28 countries in the world.
Brookfield is basically an asset management company from Canada. Its parent company is named as Brookfield Asset Management Inc. Recently many real estate trusts have launched their IPOs. The reason is India is willing to have more REIT IPOs. Hence it has been attracting such companies by favorable policies because investors love such REIT firms. The most recent IPO belonging to the same category was Mind space Business Parks REIT.
The property sector in India is suffering due to multiple reasons. First being the high interest rate of banks on loans and fear of shadow banking. In the beginning of the coronavirus situation the prices of real estate decreased significantly. The prices are on the verge of getting corrected but yet many properties have taken serious hits in valuations.
Tabular Presentation of Key Details
| IPO OPENING DATE | 3rd Feb |
| IPO CLOSING DATE | 5th Feb |
| ISSUE TYPE | Book Built Issue |
| Face Value per share | Rs 10 per share |
| IPO price band | 274 Rs. – 275 Rs. |
| LOT SIZE | 200 shares |
| MINIMUM ORDER QUANTITY | 200 shares |
| ISSUE SIZE | 3800 Crore Rs. |
| OFFER FOR SALE | NO OFS IN THIS IPO |
| FRESH ISSUE | 3800 Crore Rs. |
| LISTING AT | NSE, BSE |
| LISTING DATE | 17th Feb |
Important Details About the Brookfield India Real Estate Trust (REIT) IPO
The IPO is set to get launched on 3rd Feb. The subscription timeline extends till 5th Feb. The size for Brookfield India Real Estate Trust (REIT) IPO is 3300 Crore Rs. and no share is to be issued under the OFS method. The minimum lot size is 200 shares and the price is set at 274 Rs. – 275 Rs./ share. The company is going to get listed at both the exchanges NSE and BSE. The face value per share is Rs. 10 and this is a book built issue. The registrar for the company is Link Intime India Private Limited.
Key Dates
| IPO OPENING DATE | 3rd Feb |
| IPO CLOSING DATE | 5th Feb |
| IPO ALLOTMENT DATE | 11th Feb |
| REFUNDS | 13th Feb |
| DEMAT A/C CREDITED ON | 13th Feb |
| IPO LISTING DATE | 17th Feb |
Lot Size Details
This is the most interesting part in the Brookfield India Real Estate Trust (REIT) IPO. Normally the minimum lot size has an amount fixed at Rs. 15000. No IPOs can have the minimum lot size exceeding the price of 15000 Rs. Here the minimum lot size amounts to Rs. 55000 and the shares amounting to this are 200 shares per lot.
Hence a person has to pay Rs. 55000 for the minimum lot size of the company.
Lead Managers
The lead managers of the company are national companies for the Brookfield India Real Estate Trust (REIT) IPO. They are :
- Ambit Private Limited
- Axis Capital Limited
- IIFL Financial Holdings
- J.P. Morgan India Pvt. Ltd.
- JM Financial Consultants Pvt. Ltd.
- Kotak Mahindra Capital Company Limited
- SBI Capital markets Limited.
Overall the other lead managers pertaining to its parent company are Bank of America Corporation, Morgan Stanley, HSBC Holdings Inc., and Citigroup Inc.
The major promoter of the company is “BSREP India Office Holdings Pvt. Ltd. “
Reasons for Launching the IPO
There are two major reasons listed for launching this IPO. They are :
- To set off the borrowings so that it can downsize the debt. The company has a pile of creditors and needs to reduce them. That’s why the company is launching the IPO. By raising public funds it is to set off the borrowings and hence decrease the interest payments and save some more money.
- It can also use the funds for meeting other general corporate purposes.
Financials Pertaining to the Company
| PARTICULARS (in million Rs.) | 2019-20 | 2018-19 | 2017-18 |
| ASSETS | 53781 | 50430 | 48933 |
| REVENUE | 9813 | 9298 | 8663 |
| NET PROFIT | 151.2 | -151.8 | 1610.84 |
The company’s balance is unstable when seen on the income side. The company has high revenue generation but has low income. This means the company has high debts. Also looking at the humber it is interesting to watch out that the company had a negative income stream in 2018-19 which fell to -152 million Rs. (loss) from 1610 million Rs. of profit in 2017-18. However The company’s profits are 151.2 million Rs. this year after all the expenses which is a good sign for revival. Under normal circumstances one should avoid such companies as you never know when they fail and go out of business but this is a MNC. So taking risk is worth it in this case as it is backed by Brookfield Asset Management Inc. This company has the top lead managers domestically and internationally as well.
Pros
- The company has been affiliated itself with BAM (Brookfield asset management Inc.). It shows a positive sign to the investors because of the big name associated with it.
- It has located all its strategies strategically. This means that the company is expanding based on the business locations and hence it is making good decisions and thinking about future growth possibilities.
- It has a diversifying asset class. Hence it means the tenants of the firms are from various sectors. Hence the risk profile for the company is low. The reason is having a diversified tenant class.
- The company has good growth opportunities in the future due to its strategic locations. Another reason is the nation’s liberalization towards policies for real estate.
- The company has a great managerial team. Also it gets expertise from the parent company when required. This means that the experience of the company’s managerial team is amazing.
Cons
- The balance sheet is raising some red flags for the company. The Co. had huge losses in the previous year and is suffering from heavy debt. The company managed to become profitable this year yet the road for revival is tough for it. The major reason for a pullback is the ratio between its revenue and profits. The company generates 9000 million Rs. of revenue and has only 150 million Rs. of income. This is just 1.6% of the entire revenue which is a bad sign for the company. This clearly indicates the overburden of dent on the company.
How to Apply for IPO with Zerodha
It is very easy to apply for an IPO now if you have a DEMAT account with Zerodha. Follow the steps below for the same :
- Logging into Zerodha console through its website or KITE platform.
- Clicking the IPO link present in the Portfolio section
- Click the Brookfield India Real Estate Trust IPO button and press the BID button
- Entering the details asked for like UPI ID, Quantity and price
- Submit the application form of IPO
- Visiting the application of UPI for approving the transaction
Now, applying for IPO online is possible with most of the Discount and online brokers.
