This post on Brookfield India REIT IPO attempts to bring out consolidated brokerage views , subscription information, Grey Market Premium (GMP) and anchor investor information where applicable. The information collated from various sources and reports in public domain can help investors to decide whether they should subscribe to Brookfield India REIT IPO or not.
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- 04-02-21 Not much activity
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Consolidated Brokerage Views on Brookfield India REIT IPO
Angel Broking :”Though the REIT has incurred losses in FY20 and has not paid out any dividends, they expect to pay a yield of 7.5% in FY23 which we believe is aggressive and may be difficult to acheive. Post the IPO there will also be a debt reduction of ~ ₹3,575 crore for the company which will bring down the overall debt. However due to the current uncertainties around Covid-19 and proliferation of work from home we expect that demand for commercial real estate to be muted. Given the uncertainties, weak financials and high debt on book we would recommend a “Neutral” rating on the issue.”
Choice Broking: “Since technology companies accounts for around 50% of the leased area of existing portfolio and considering their positive outlook (technology sector), we don’t think there will be any concerns on future tenancy. Based on the projected distribution schedule, pre-tax yield would remain in the range of 8-8.5% in FY23E. With interest rate at lower levels in the economy, the projected yield from this REIT seems to be attractive. Thus considering the above observations, we assign a “Subscribe for Long Term” rating for the issue.”
Dalal Street Inv Journal: “Looking at the subdued interest rate in the economy and anticipating it to remain low for a while, the projected yield from this REIT seems to be attractive. Therefore, the issue is suitable to only those investors who want to diversify their investment and can invest that part of their portfolio that they would be parking in debt component or real estate.”
KR Choksey: “At higher end of unit price of INR 275, it is available at steep discount of 11.6% to its NAV/ unit as of 30th September 2020 which stands at INR 311 NAV/unit. As of 14th Dec-20 its peers, Embassy office Park REIT and Mindspace Business Park REIT were trading at discount of 5.3% and 3.0% respectively of its NAV/unit. Brookfield at 11.6% discount of its NAV/units provides a comfort to its valuation. Thus, we recommend a “SUBSCRIBE” rating for the IPO.”
Reliance Securities: “The company expects NDCF to the tune of Rs 660 crore and Rs 700 crore in FY22E and FY23E, respectively which offer yield of ~8%. Hence, we recommend SUBSCRIBE from long-term perspective”
Sharkhan: “Post the utilisation of the net proceeds from the Offer, their total outstanding indebtedness in principal amount is expected to be less than 18.5 percent of their initial market value, providing them significant financial flexibility to grow through economic cycles, At Rs 275 per unit, it is expected to give pre-tax yield of 7.95 percent in FY22 and 8.43 percent in FY23. However, the payout of the first year will have 85 percent interest component (taxable in hands of investor) and 15 percent dividend (tax free). The interest component will be reduced over a time as the dividend component increases”
SP Tulsiyan Website: “Unattractive yield over peer and expected rise in interest rates over next few quarters make the risk reward unfavourable. Hence, we advise giving Brookfield REIT a ‘miss’.”
Standard disclaimer: Standard disclaimer: I am not a SEBI registered analyst /investment adviser and above information is collated from various online sources and is for educational purpose only. Please visit individual brokerage sites to read the actual reports. Please do not make your investment decisions based on this info as it is not complete and exhaustive. Please do your own due diligence as stock market investments have high degree of inherent risk.