In union budget 2021-22, the FM has announced capital infusion for development of healthcare centres, healthcare institutions, swatch Bharat schemes, construction of National highways and highways and building 7 new textile parks among others.
Brookfield India Real Estate Trust is all set to hit the markets with its IPO. This will be the third REIT IPO after the successful listing of Blackstone Group Inc backed Mindspace Business Parks REIT last year and Embassy Office Parks REIT in 2019.
India is backed by Canadian asset manager – Brookfield Asset Management Inc and
is looking to raise INR 3,800 crores through this IPO.
Holdings Group Inc, a Brookfield entity, holds a 99% stake in the REIT.
India Real Estate Trust is managed by Brookprop Management Services Private
Investors – 75%
Non Institutional Investors – 25%
Global sponsorship with local expertise
Dominant & strategically located properties
Diversified blue chip tenant roster and cash flow stability
Significant identified internal and external growth opportunities
Experienced senior management team.
Institutional corporate governance framework & strong alignment of interests
Brookfield India reported
its EPS at 15.1 for the year ended March 2020, bringing the IPO valuation to a
P/E of 18.2 at upper price band, against sector PE of 26.5.
However, it bears the
risk of high Debt to EBITDA ratio, which can be considered a negative point.
So, we stay neutral
on our views for the IPO.
Utilization of Funds
Background highlights of the company in brief
The Brookfield India Real Estate Trust is India’s only institutionally managed public commercial real estate vehicle. It is sponsored by an affiliate of Brookfield Asset Management (Brookprop Management Services Private Limited), one of the world’s largest alternative asset managers with approximately USD 575 billion in AUM, as of September 30, 2020, across real estate, infrastructure, renewable power, and private equity and credit strategies.
Brookfield Asset Management has a global presence of over 150,000 operating employees across more than 30 countries, as of September 30, 2020.
As of September 30, 2020, Brookfield Asset Management has over USD 200 billion of real estate AUM, and over 500 Msf across multiple real estate asset classes, with strong real estate capabilities in leasing, financing, development, design, construction and property management.
In India, the company has a decade-long presence and manages a portfolio of approximately USD 17 billion across real estate (USD 4.6 billion), infrastructure (USD 9.7 billion), renewable power (USD 0.6 billion) and private equity (USD 2.1 billion) as of September 30, 2020.
The Brookfield India Real Estate Trust comprises of grade-A commercial assets located in four major cities – Mumbai, Gurgaon, Noida and Kolkata.
Multi-national corporations like Barclays, Bank of America Continuum, RBS, TCS, Cognizant, and Accenture are some of the clients of Brookfield India Real Estate Trust.
The company’s initial portfolio of four large campus-format office parks, which are “business-critical” totals to 14.0 M sf, comprising 10.3 M sf of Completed Area, 0.1 M sf of under construction area and 3.7 M sf of Future Development Potential and comprises of Kensington, Candor Techspace, Sector 21, Gurugram, Candor Techspace, Sector 62, Noida and Candor Techspace, Rajarhat, Kolkata.
The competitive strengths of the company has translated into the office parks outperforming in their micro-markets through a marquee tenant roster, high and consistent occupancy levels, strong renewal and expansion history with existing tenants and outsized rental growth.
The company’s strategy is to address the real estate demand by owning and operating large “fully-integrated”, “campus style” office parks in established locations, and providing a complete ecosystem to its tenants and their employees.
Briefing about directors & key managerial personnel
(Board of Directors – Brookprop Management Services Private Limited)
During the previous week in the COMEX market, base
metals such as Aluminum, Zinc and Iron Ore witnessed low volatility, closing lower
by more than 1%. Lead prices stayed unchanged for almost whole week, again
closing almost at par. However, Silver continued to fall in the start of the
week, but started its uptrend journey Thursday onwards. Whereas, Gold traded in
the range of 1,853 to 1,856, ending the week unchanged.
During the week, Silver made a tragic comeback,
gaining more than 8% after the prices rallied on Friday, as the traders piled
into silver on short squeeze sparked by Reddit posters call. The entire market
– from miners’ shares to exchange-traded funds and even the physical metal –
has emerged as one of the latest targets of investors. Posts encouraged people
to pile into IShares Silver Trust, the largest silver exchange-traded fund, and
one described it as “THE BIGGEST SHORT SQUEEZE IN THE WORLD.”
Prices of gold inched higher a bit during the
week after the Finance Minister Nirmala Sitharaman in Budget 2021 proposals
said that the government will rationalize customs duty on gold and silver.
Currently, gold attracts 12.5% import duty. The government announced cut in
customs duty on gold and silver to 7.5% from 12.5%. Indian imports bulk of its
gold and silver requirements.
The precious metals were also supported as the
European equities witnessed a retreat as the region fight over COVID-19 vaccine
supply, alongside increasing number of COVID-19 cases. However, the gains in
the precious metals was capped after the release of better than expected
economic data of UK, France, Germany and Spain.
For the current week, investors needs to keep a
watch on economic data such as Eurozone’s Final Manufacturing PMI, UK’s Final
Manufacturing PMI, US’ Final Manufacturing PMI, ISM Manufacturing PMI, on 1st
February, US’, Eurozone’s and UK’s Final Services PMI, Eurozone’s PPI, US’ Crude
Oil Inventories on 2nd February, UK’s Asset Purchase Facility, BOE
Monetary Policy Report, BOE Gov Bailey’s speech on 4th February and
US’s unemployment rate on 5th February.
In the current week, we expect gold in COMEX
market to be in the range of $1,799 to $1,908, while silver is expected to be
in the range of $24.5 to $31.5. Whereas, as per our prediction for bullion
market traders, gold futures will trade in the range of 47,007 to 51,714.