Tag: Brookfield IPO

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NTPC Group Crosses 3 GW Operational Renewable Energy Capacity – Top Indian Market Updates

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Here are some of the major updates that could move the markets tomorrow:

NTPC Group crosses 3 GW operational renewable energy capacity

NTPC Group (including joint ventures and subsidiaries) has crossed 3 gigawatts (GW) of operational renewable energy (RE) capacity. The group achieved this milestone with the commissioning of Phase 1 of the 300 megawatts (MW) Nokhra Solar PV Project at Bikaner, Rajasthan. The company now has 36 operational RE projects spread across 12 states with a cumulative capacity of 3,094 MW.

Read more here.

Delhivery to acquire supply chain solutions provider Algorhythm Tech

Delhivery Ltd will acquire Pune-based supply chain solutions provider Algorhythm Tech (AT) to strengthen its offerings in this space. Post completion of this transaction, AT will operate as a wholly-owned subsidiary of the company. Algorhythm Tech offers end-to-end supply chain planning and execution products to clients across various sectors such as FMCG, pharma, steel, auto, and telecom.

Read more here.

Adani Group company VCPL has picked up 8.27% stake via open offer: NDTV

NDTV has disclosed that Adani Group firm Vishvapradhan Commercial Pvt. Ltd. (VCPL) has acquired an 8.27% stake in the company in the recently concluded open offer. Adani’s total shareholding in the media company has increased to 37.45% with the closure of the open offer. The open offer was triggered after VCPL acquired a 99.5% stake in RRPR Holding Pvt. Ltd. (RRPR), which translated to 29.18% of the shareholding in the TV news company. To learn more about the takeover, click here.

Read more here.

Shyam Metalics enters stainless steel business with Mittal Corp buyout

Shyam Metalics & Energy Ltd (SMEL) seeks to conclude its acquisition of Mittal Corp to strengthen its metal portfolio by entering the stainless steel/wire rod & bar mill business. The company has embarked on a ‘diversification approach’ in the metal space to chart its growth journey and proposes to further invest ₹7,500 crore over the next five years. SMEL aims to increase its capital expenditure (capex) to ₹10,000 crore in the next five years for organic and inorganic expansion.

Read more here.

Banks write off loans worth ₹11.17 lakh crore in last 6 years

Banks have written off bad loans worth ₹11.17 lakh crore from their books in the last six years till the financial year 2021-22, said Minister of State for Finance Bhagwat Karad. The non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from banks’ balance sheets by way of write-offs. Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefits, and optimise capital.

Read more here.

Tata Motors migrates dealer management system to Oracle Cloud Infrastructure

Tata Motors announced the migration of its entire Dealer Management System (DMS) to Oracle Cloud Infrastructure (OCI). The move is expected to boost the automaker’s operational efficiencies with deeper business insights, greater security, increased flexibility, and cost optimisation. The DMS supports Tata Motors’ pre-sales, sales, and after-sales market touchpoints across all segments of passenger and commercial vehicles.

Read more here.

Bharti Airtel acquires strategic stake in Lemnisk

Bharti Airtel has acquired a strategic stake in Lemnisk (Immensitas Private Limited) under its StartUp Accelerator Program. Airtel will work towards creating a customer data platform (CDP) across its digital business, including ad-tech (Airtel Ads), Digital Entertainment (Wynk Music and Airtel Xstream) and Digital Marketplace (Airtel Thanks App) through this acquisition.

Read more here.

Capacit’e Infraprojects bags Rs 117 crore order from DLF

Construction firm Capacit’e Infraprojects Ltd has bagged an order worth ₹117.20 crore from DLF Ltd for the construction of a mall in Goa. The contract amount excludes GST and labour cess. The company said the order inflow for the current fiscal, along with the existing order book, gives it confidence to deliver good growth in the coming quarters.

Read more here.

CCI approves Brookfield’s minority stake buy in UPL Sustainable Agri Solutions Ltd

The Competition Commission of India (CCI)  has approved Woodhall Holdings Ltd’s acquisition of a minority stake in UPL Sustainable Agri Solutions Ltd (UPL SAS). The deal has been cleared under the green channel route. Under this framework, a transaction which does not raise any risk of an appreciable adverse effect on competition is deemed to be approved on being intimated to the fair trade regulator.

Read more here.

Care Ratings predicts 12-15% growth in general insurance premium

Care Ratings expects the gross direct premium of general insurance companies to grow by 12-15% in the medium term, with private insurers continuing to outperform government-owned insurers. Lower health insurance payouts post Covid, increase in prices of group insurance and easing of solvency requirements for crop insurance will support growth for general insurance companies in the next financial year, said the rating agency.

Read more here.

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Editorial

Brookfield REIT IPO: All You Need to Know

IPOs in 2021 are coming thick and fast. Brookfield REIT is going to take the public route on 3rd February 2021. Without wasting any time, let’s analyse what the company is all about and how good their IPO can be.

About Brookfield REIT

The company is India’s only fully institutionally managed public commercial real estate vehicle. REIT stands for Real Estate Investment Trust. Brookfield REIT will be the third such REIT in India which is taking a public route. The other two listed REITs are Embassy Office Parks and Mindspace REIT, both of which had their IPOs in 2020. These trusts do not have promoters like other companies but have sponsors.

Similar to mutual fund houses, REIT collects funds from investors. It pools the small amounts and then invests it somewhere to collect the return, mainly in real estate. A portion of the return generated is passed on to the investors. REIT invests the pooled money into the real estate sector. It also issues out loans to companies so that they can build the infrastructure.

Brookfield REIT has four offices in India in Mumbai, Noida, Gurugram, and Kolkata. List of reputed clients includes Bank of America Continuum India, TCS, Cognizant and Accenture.

About the IPO

Brookfield REIT’s IPO will be launched on 3rd February and will close on 5th February. The price band of this unit is fixed at Rs 274-275 per unit. The company is planning to raise Rs 3,800 crore from this public route with the aid of fresh issue. The market lot of this IPO is 200 shares. Do note that generally, for an IPO, you have to issue out Rs 15,000 but here the minimum amount you have to invest in this IPO is Rs 55,000 because it is a REIT. The allotment date and listing date for the IPO are 11th February 2021 and 17th February respectively. 

The objective of the IPO is to meet the partial or full payment of existing indebtedness of the Asset SPVs (Special Purpose Vehicles). Some part of the amount generated will be used to meet general corporate purposes.

Financial Overview


30 September 202031 March 202031 March 201931 March 2018
Total Assets5136.725378.055043.704893.30
Total Income467.4715.12-15.74161.08
Profit after Tax-73.9215.12-15.74161.08
(Values in Rs Crore)

As seen in the table above, the company’s revenue has increased from Rs 866 crore to Rs 981 crore from FY18 to FY20. The revenue has increased on a consistent basis but that can’t be said about the all-important profit numbers. After collecting a profit of Rs 161.08 crore by March 2018, Brookfield REIT recorded losses worth Rs 15 crore next year. Last year, they declared a profit of Rs 15 crore, which was still below expectations.

A major worry for the potential investors is that till September 2020 (H1 FY21), they have aggregated losses worth Rs 73 crore. Being a REIT, it becomes very important for them to hold assets. But, we can’t see great growth in the company’s assets too. In the last three years, the assets of the company have increased by a mere 5%. In fact, their assets have seen a decline in the past six months. The total assets worth by March 2020 was Rs 5,378 crore which has declined to Rs 5,136 crore by September 2020. Overall, the entity holds a significant debt of approximately Rs 6,600 crore which they aim to reduce with the IPO.

Risk Factors

  • As mentioned above, the company holds a debt which you have to wary of. Higher the company’s debt, greater the risk for you as an investor. Currently, their interest coverage ratio is less than 1. This tells us that the company is struggling to meet its interest payments.
  • Brookfield REIT does not provide any guarantee of distributing profits to the unitholders.
  • The ability of the company to dispose of their assets or even the choice of investment in other opportunities is subjective to REIT regulations. Thus, a lot of movement is regulated and flexibility in investments can be seen.
  • The growth of the company is highly dependent on commercial real estate development of India. Any setback to this sector of the country will massively impact the business of Brookfield REIT.

IPO Details in a Nutshell

IPO DateFeb 3, 2021
Issue TypeFeb 5, 2021
Face ValueRs 10 per equity share
IPO PriceRs 274 to Rs 275 per equity share
Lot Size200 Shares
Issue SizeRs 3,800 crore
Listing AtNSE, BSE

Conclusion

Brookfield India Real Estate Trust is backed by Brookfield Asset Management which is a global alternative investment company. Having such a powerful global sponsor gives belief to the investors. The industry has a bright future with a large scope of growth. Union Budget 2020-21 also came out with a lot of incentives for real estate sector. But will Brookfield REIT be able to gain from this opportunity? The financials of the company are not great. But is that the only thing which should be considered? Embassy REIT and Mindspace REITs can be looked at if you look at real estate as a sector with a good future.

Brookfield REIT filed its draft papers last September. You can find it here. What are your opinions on this IPO? Will you be applying for it? Let us know in the comments section below!