The price band of the issue is Rs 274-275. Its lot size is 200 units. That is, investors will have to buy at least 200 units and after that they will be able to subscribe to this IPO in multiple of it. The company will use the money raised through this IPO to discharge its debt. With the experts of the stock markets, you can understand the advice of investing in it.
Market expert KR Choksi said that given the company’s existing portfolio and possibilities of further expansion, strong cash flow is expected. The upper band of the issue price is Rs 275, which is 11.6 per cent lower than the NAV per unit of September 2020. The NAV was Rs 311 per unit in September 2020. Choksi said, “As of December 14, 2020, Brookfield’s rival companies such as Embassy Office Park REIT were trading at a 5.3 per cent and Mindspace Business Park REIT at a 3 per cent discount. In comparison, Brookfield’s issue price is at a 11.6 per cent discount to improve its valuation. So we can invest in this IPO.
How strong is the company: no problem of cash flow for seven years
The company’s WALE (weighted average lease expiry) is 7.1 years. That is, it would take an average of 7.1 years for the company contract in the office contract to end. That is, till then the company will not have problems of cash flow. The company is in a position to earn well from both organic and contractual leases. The company has done rental contracts for office space with several multinational companies. These include Barclays, Bank of America Continuum, RBS, Accenture, Tata Consultancy Services and Cognizant. It is worth noting that Brookfield India is the only commercial real estate vehicle that is managed in a 100 percent institutional manner. This company has 4 large format office parks, which are considered important areas in terms of business. It is in Mumbai, Gurugram, Noida and Kolkata.
The company has a debt of 6952.07 crores
In FY 2020, Brookfield India had a profit of Rs 15.12 crore. Whereas its profit was Rs 15.75 crore a year ago. The total revenue of the company increased by 5.54% to Rs 981.40 crore. The total outstanding debt on the company as on 31 March 2020 was Rs 6952.07 crore. Brookfield India, parent company of Brookfield India, manages assets worth $ 578 billion, or about Rs 5.44 lakh crore globally. At the same time, in India, the company manages 2.20 lakh square feet of office property in the field of infrastructure and real estate. Apart from this, the company has 7 toll roads, whose total length is more than 600 km.
What is REIT and its IPO
REIT means Real Estate Investment Trust is a company that divides real estate assets into units like shares. Investors can invest in these units. In this, the investors do not own any physical property, but they get a share in the earnings from that property. In REIT IPO, the company raises money from people and institutional investors just like a normal IPO. The funds raised through this IPO are used on real estate projects and the share of profits from that project gets to investors who invest in it every year. Also, investors get the benefit of the increase in the value of the property. That is, when companies bring an IPO to raise funds for the development or construction of a real estate property, then they are called REIT IPO.