Brookfield India Real Estate Trust had a disappointing start as it closed at a 1.8 percent discount to the issue price on February 16, the day of listing. The reported loss in the first half of FY21 and volatility in the equity market could be the reason behind the weak listing day.
It opened at Rs 275.05 per unit, almost flat compared to the issue price of Rs 275 on the BSE. After an initial small spike up to Rs 280.05, the stock traded below its issue price for rest of the day and hit an intraday low of Rs 258.35.
On the National Stock Exchange, it touched an intraday high of Rs 281.70 (which was also its opening price) and low of Rs 258, before closing the session at Rs 268.93, down 2.21 percent.
Brookfield India REIT traded with 12,70,200 units on the BSE and 82,81,600 units on the National Stock Exchange.
"We believe investing in REITs kind of product is still in a very nascent stage for Indian investors compared to global markets and one should understand it better before investing. REITs are long-term investment products through which investors or unit holders can own income-generating commercial buildings and office spaces properties which they otherwise can't afford to invest in directly," Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.
Brookfield India REIT sees tepid listing; what should investors do?
Brookfield India REIT raised Rs 3,800 crore through public issue during the first week of February. The company will utilise issue proceeds for debt repayment.
It is India's only institutionally managed public commercial real estate vehicle, sponsored by an affiliate of Brookfield Asset Management. The goal of the entity is to be the leading owner of high-quality income-producing commercial real estate assets in key gateway Indian markets, which have significant barriers to entry.
Its initial portfolio stood at 14.0 million square feet (msf) comprising 10.3 msf of completed area, 0.1 msf of under construction area and 3.7 msf of future development potential.
It has rights to acquire a further 8.3 msf and rights of first offer on an additional 6.7 msf, both currently owned by members of the Brookfield Group.
"Those who are looking for diversification and want to invest in high yielding commercial realty may go for buying and investing REIT. REITs, unlike equity, are bought by investors not only for the unit price appreciation but also for dividend yields which can be higher than bank FD's," Tapse said.
"Considering Brookfield’s positive long-term outlook with long-term gains from yields distribution, capital appreciation seems to be attractive. Thus considering the above points, we advise allotted investors to hold Brookfield REIT post listing," he added.