Knowledge Realty Trust opens Rs 4,800 cr IPO Tuesday

BENGALURU: Knowledge Realty Trust (KRT), sponsored by real estate firm Sattva Group and Blackstone, is set to open its Rs 4,800 crore initial public offering (IPO) on Tuesday at a price band of Rs 95-100 per unit. Upon listing, KRT is expected to become India’s largest office REIT and the second-largest in Asia by gross asset value. The issue closes on Thursday.Ahead of the IPO, KRT raised Rs 1,400 crore in a pre-IPO placement from family offices and high-net-worth investors. This early round led to a reduction of the size of the public issue from the originally planned Rs 6,200 crore to Rs 4,800 crore.The IPO will be conducted through a book-building process, with 75% of the offer (excluding the strategic investor portion) reserved for institutional investors and at least 25% for non-institutional bidders. The minimum bid size is 150 units, amounting to Rs 15,000.All proceeds from the issue will be used to pare debt, which will bring down the REIT’s loan-to-value ratio to 19%. “The entire offering is to reduce debt. That gives us one of the lowest leverage levels among REITs and positions us strongly for growth,” Shirish Godbole, CEO of Knowledge Realty Trust, told TOI.KRT’s portfolio spans 29 Grade-A office properties across six cities – Hyderabad, Bengaluru, Mumbai, Chennai, Gurugram and GIFT City – covering 46.3 million sft, including 9.2 million sft of under-construction and future development. Its gross asset value stands at Rs 62,000 crore.Godbole said KRT’s edge lies in its location quality and expansion strategy. “We have assets in irreplaceable micro-markets such as Hyderabad’s HITEC City, Mumbai’s BKC and Lower Parel and Bengaluru’s Outer Ring Road. These locations not only capture upside during market growth but also hold value in downturns,” he told TOI.Quaiser Parvez, COO of KRT, highlighted the REIT’s tenant profile as another differentiator. “We have 450 occupiers, 76% of them multinationals, with no single tenant contributing more than 6% of our gross rents. About 45% of our rent comes from global capability centres. This gives us minimal concentration risk,” Parvez said.KRT also plans to pursue third-party acquisitions through a “brand-neutral” platform that allows local developers to retain their branding while monetising assets. “This approach opens the door to acquisitions from smaller size builders of Grade A assets across key markets, non-strategic owners such as family offices or corporates, something Indian REITs have barely tapped,” Godbole said.Another distinguishing factor, according to Godbole, is KRT’s limited exposure to special economic zone (SEZ) assets. “Tenants today prefer non-SEZ space because SEZs have lost their tax benefits but continue to carry compliance requirements. Our lower SEZ exposure positions us better for demand,” he noted.Lead managers for the IPO include Kotak Mahindra Capital, Axis Capital, BofA Securities India, ICICI Securities, IIFL Capital, JM Financial, Morgan Stanley India and SBI Capital Markets. The units are proposed to be listed on the NSE and BSE.