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Industry : Real Estate

Nexus Select Trust View all IPOs

Price Band

Rs. 95 To Rs. 100

Nexus Select Trust is going public with a Fresh Issue and an Offer for Sale. The issue opens on 9th May 2023.

MOJO CALL

Why

Avoid

MOJO CALL

Avoid

Neutral

REITs as an Asset Class Have Failed to Grab the Interest of Investors

Three REITs are listed on exchanges, and all three have fallen short of expectations. One of the basic presumptions is that they pay good dividend, which is correct, but one should never invest in assets like REITs solely for the dividend because capital erosion results in poor total returns. Nexus, we feel, might face a similar fate.

Rich Valuation

While three of the listed REITs are in the office space category, Nexus is in retail malls. Nexus reported losses in FY2022, while the other three claimed profits. The company posted a net profit of Rs 257 crore in the first nine months. For our comfort, we would have preferred more consistent financial performance from Nexus. It requires a Market Cap-to-Sales ratio of 11.5x, which is quite high.

Issue Details

Issue Opens	9th May 2023
Issue Closes	11th May 2023
Price Band	Rs. 95 To Rs. 100
Issue size (Upper Band)	Rs. 3200 Cr
Issue Type	FRESH ISSUE & OFFER FOR SALE
Market cap (based on upper band)	Rs 15150 Cr
Sales- March 2022 (Rs./Crs)	1318 Cr
Net Profit - March 2022 (Rs./Crs)	-110 Cr
Industry	Real Estate
Promoters	Blackstone
Lead Manager	Morgan Stanley

Objective of the Issue

Details

Fresh Issue of Rs 1400 crore and Offer for Sale of Rs 1800 crore totaling Rs. 3200cr

The funds collected from the Offer for Sale will not be used by the company.

Partial or full repayment or prepayment and redemption of certain financial indebtedness of Asset SPVs and the Investment Entity

Acquisition of stake and redemption of debt securities in certain Asset SPVs; and

General purposes

List of Shareholders Selling Their Stake

Name	Name
BRE Coimbatore Retail	BREP Asia SBS Red
Holdings Ltd.	Fort Holding (NQ) Ltd.
BREP Asia SBS	BREP Asia SG Forum
Coimbatore Retail	Holding (NQ) Pte. Ltd.
Holding (NQ) Ltd.	BREP Asia SG Red Fort
BREP Asia SBS Forum	BREP VIII SBS

Business Operations

About Company

Nexus Select Trust is a Real Estate Investment Trust with malls in 14 Indian locations.

As of December 31, 2022, its Portfolio included 17 best-in-class Grade A urban consumption centers with a total leasable area of 9.2 msf, two complementary hotel assets (354 keys), and three office assets (1.3 msf).

They own the country's largest portfolio of consumption centers.

List of Consumption Centers:
Properties	Leasable Area(msf)
Select Citywalk	0.51
Nexus Elante	1.25
Nexus Seawoods	0.97
Nexus Ahmedabad	0.88
Nexus Hyderabad	0.83
Nexus Koramangala	0.3
Nexus Vijaya	0.65
Nexus Westend	0.44
Nexus Esplanade	0.42
Nexus Amritsar	0.54

Financials

Financial Overview

In 9 months till December 2022, the company reported a revenue of Rs. 1463 crore and a net profit of Rs. 257 crore.

In FY22, the company reported a revenue of Rs. 1318 crore, compared to Rs. 907 crore of FY21.

The company reported net loss of Rs 110 crore in FY2022, compared to loss of Rs 199 crore.

Financial Performance (Rs/crore)

Rs./Crs	9MFY23	FY 22	FY 21	FY 20
Sales	1463	1318	907	1622
Net Profit	257	-110	-199	207
Net Profit Margin	18%	-8%	-22%	13%