Investors’ approval of Embassy Office Parks REIT IPO

The initial public offering (IPO) of Embassy Office Parks REIT, India’s first REIT to be listed, was fully subscribed on Wednesday, the last day of the three-day initial share sale, data from the stock exchanges showed. As of 5.30pm on Wednesday, the Embassy REIT IPO was subscribed 2.58 times, with institutional investors subscribing 2.15 times of the portion reserved for them. The portion reserved for high net-worth individuals and retail investors was subscribed 3.1 times. The IPO, which opened on 18 March, was subscribed 47% on Tuesday. On 15 March, the REIT had raised ?1,743 crore by allocating units to institutional investors as part of its anchor book allocation, stock exchange data showed. Amit B Wadhwani, Co-founder, Sai Estate Consultants, shares, “The over subscription of the Blackstone and Embassy Group REIT almost by 120% only means  the fact that the consumer and the retail investor has been reinforced with confidence of buying back in the commercial real estate in the country . This means that they can now trade into a security which was difficult to consume  and difficult to purchase without having a large capital at their disposal. Also read http://realtyplusmag.com/30-buildings-in-girgaum-make-way-for-colaba-seepz-metro-3-corridor-2/ The oversubscription would mean that a certain portion of the subscribers may not end up getting the number of shares that they would have subscribed to. Which means, as a rule from SEBI, only the book value of the share which is at approximately Rs. 300 would be given to a 100% of its subscribers  and there might be a certain section that will not get the number of shares that they had subscribed for. This is a very positive, long overdue step which has been taken by the SEBI to go ahead with such investments in the capital markets for the real estate eco system and in the near future we can expect larger, if not smaller, REITs to come in which will be accessible to the retail investor to have multiple options in their portfolio.”