Blackstone & Sattva file DRHP for India’s biggest REIT IPO

Blackstone and Sattva Developers, the backers of Knowledge Realty Trust, have submitted draft documents to the Securities and Exchange Board of India (SEBI). This Trust, a joint venture between Sattva Group and Blackstone, stated in its Draft Red Herring Prospectus (DRHP) that it aims to raise up to ₹6,200 crore through an initial public offering (IPO).

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As per the DRHP, Knowledge Realty Trust (KRT) is India's largest Real Estate Investment Trust (REIT) in terms of Net Operating Income (NOI) and Gross Asset Value (GAV)/Valuation. It also ranks as the second-largest in Asia by leasable area. The Trust's portfolio spans 48 million sq. ft. (with 37 million sq. ft. completed) across 30 Grade A office properties in six cities, making it India's most geographically diverse Office REIT. Approximately 95% of its value is concentrated in India's top three office markets—Bengaluru, Hyderabad, and Mumbai.

The IPO will be conducted through the book-building process, a mechanism that allows investors to bid within a price range set by the issuer. This method ensures transparency and helps determine the final price based on demand.

"The Price Band will be determined by the manager in consultation with the lead managers and will be disclosed at least two working days before the bid/issue opening date. This information will be available on the websites of Knowledge Realty Trust, the Manager, the Blackstone Sponsor, the Sattva Sponsor, stock exchanges, and in newspapers where the pre-Issue advertisement will be published, if applicable," states the DRHP.

The DRHP further specifies that the units will be listed on the BSE and the National Stock Exchange of India (NSE). Knowledge Realty Trust has already received in-principle approvals from the stock exchanges for the listing.

KFin Technologies has been appointed as the registrar for the IPO, while the book-running lead managers include Kotak Mahindra Capital Company, Axis Capital, BofA Securities India, ICICI Securities, SBI Capital Markets, Morgan Stanley India Company, JM Financial, and IIFL Capital Services. These financial institutions will play a crucial role in managing and underwriting the issue.

The net proceeds from the offering will primarily be used for partial or full repayment or prepayment of certain financial obligations of the Asset SPVs and Investment Entities, along with general corporate purposes. This strategic move will help the trust strengthen its financial position and provide additional capital for future growth opportunities.

Established on October 10, 2024, in Mumbai, Maharashtra, Knowledge Realty Trust is a contributory, determinate, and irrevocable trust formed under the Indian Trusts Act, 1882. The Trust was settled by the Manager (on behalf of the Sponsors) with an initial sum of ₹0.1 million. Currently, its sponsors include BREP Asia SG L&T Holding (NQ) Pte Ltd (the Blackstone Sponsor) and Sattva Developers (the Sattva Sponsor).

Knowledge Realty Office Management Services Private has been appointed as the manager for Knowledge Realty Trust, while Axis Trustee Services has been designated as the trustee.

Given the increasing demand for Grade A office spaces in India's key business hubs, KRT's IPO is expected to attract significant interest from both institutional and retail investors. The REIT model has gained momentum in India, providing investors with an opportunity to gain exposure to premium commercial real estate while benefiting from stable rental yields and potential capital appreciation.