Knowledge Realty IPO review

•    The company is engaged in owning and managing a high-quality office portfolio in India.
•    Its prime location in Mumbai, Hyderabad and Bengaluru brings over 90% of its total revenue.
•    It is the most preferred office space supplier in India and serves renowned Indian and global clients.
•    It has posted profitable performances for the last three fiscals.
•    This investment is purely for long term purpose to get justified returns.
•    Investors may park funds for steady return and appreciation on maturity.

ABOUT COMPANY:
Knowledge Realty Trust ReIT (KRTR) owns and manages a high-quality office portfolio in India, and upon listing, it will be the largest office REIT in India based on Gross Asset Value (“GAV”) of Rs. 61999 cr. as of March 31, 2025 as well as by Net Operating Income (“NOI”) for FY2025 of Rs. 3432.27 cr. It will also be the second largest office REIT in Asia and one of the largest office REITs globally in terms of Leasable Area as of March 31, 2025. KRTR’s Portfolio comprises 29 Grade A office assets totaling 46.3 msf as of March 31, 2025, with 37.1 msf of Completed Area, 1.2 msf of Under Construction Area and 8.0 msf of Future Development Area. It expects to be the most geographically diverse office REIT in India upon listing with Portfolio Assets spread across 6 cities which collectively represent more than 86.5% of both of India’s office supply and gross absorption from CY2016 to Q1CY2025. 

With a multi-market geographical presence and assets comprising both front offices and integrated business parks, its Portfolio reflects a broad proxy of the Indian office market. (Source: CBRE Report)
KRTR’s Portfolio comprises 6 city-center offices and 23 business parks/centers, with some of its assets being best-in-class developments in their respective sub-markets and in the country according to the CBRE Report. It will have the largest city-center office portfolio upon listing compared to other listed Indian office REITs as of March 31, 2025, both in terms of Leasable Area and number of assets, as per data from the CBRE Report. Its Portfolio Assets house a diversified tenant mix of prominent multinational tenants, including Fortune 500 companies and Global Capability Centers (“GCCs”), as well as leading domestic corporates. The size and scale of its Portfolio enables the company to offer comprehensive space solutions with robust infrastructure and wide-ranging amenities that support tenant expansion within these assets. 

Its geographic diversity also provides flexible leasing options to tenants seeking expansion across multiple locations. With a diverse tenant base of more than 450 tenants as of March 31, 2025, it caters to both categories of office occupiers in India, namely domestic tenants focusing on the Indian market (‘Office for India’) and multinational and GCC tenants catering to the global markets (‘Office for the World’). According to the CBRE Report, its Portfolio Assets are considered to be of superior-quality due to their scale, accessible locations, infrastructure, amenities, sustainability, professional management and asset enhancement initiatives. KRTR’s Portfolio is one of the leading office platforms in India and is difficult to replicate given the aforementioned factors, its multi-market presence and best-in-class assets in some of the most prominent sub-markets with favorable dynamics and high barriers to entry, particularly due to land acquisition complexities and lengthy development timelines for projects in India, according to the CBRE Report.

Its Portfolio Assets are spread across 6 cities, namely Hyderabad, Mumbai, Bengaluru, Chennai, Gurugram and GIFT City, Ahmedabad. A significant portion of Portfolio (approximately 95.6% of GAV as of March 31, 2025), is located in Bengaluru, Hyderabad and Mumbai, which are the best performing office markets in India in terms of market size and absorption levels (collectively, its “Portfolio Core Markets”). Its Portfolio has a Committed Occupancy of 91.4% as of March 31, 2025, which will be the highest compared to other listed Indian office REITs, as per data from the CBRE Report. Its Portfolio Assets serve a diversified tenant base with 74.1% of Gross Rentals from multinational tenants, 43.6% from GCCs and 38.2% from Fortune 500 companies for the month ended March 31, 2025. Its city-center office buildings are strategically located in some of the most prominent sub-markets of Mumbai and Bengaluru and serve as preferred locations for front-office tenants, as per the CBRE Report. 

KRTR’s city-center office buildings provide high-quality infrastructure to prominent multinational corporates such as Amazon, Cisco and Franklin Templeton Asset Management (India) Private Limited, and house distinguished domestic organizations such as HDFC Bank Ltd and Aditya Birla. Most of its business parks/centers are located in Bengaluru and Hyderabad and serve notable GCC tenants such as Apple, Google Connect, Novartis and Goldman Sachs. Its Portfolio’s 61.7% Retention Rate from FY2023 to FY2025 is a reflection of its superior infrastructure and focus on providing a comprehensive ecosystem to tenants, supporting over 275,000 employees working across Portfolio Assets as of March 31, 2025. Its Portfolio Assets offer a wide range of amenities, such as multi-cuisine food courts, exclusive members-only clubs, indoor and outdoor sports facilities, medical clinics, creche, and other health and recreation facilities.

Over the last 3 decades, India has emerged as a leading technology and corporate services hub supported by ample availability of skilled and cost-efficient talent, the largest youth population in the world as of December 31, 2024, the second largest English-speaking population as of FY2024 as well as favorable government policies. As a result, India’s office market has emerged as one of the largest office markets in the world in terms of cumulative net absorption from CY2016 to Q1CY2025. In particular, its Portfolio Core Markets have collectively absorbed more office space than 11 global cities (Tokyo, Shanghai, Beijing, Singapore, Munich, Hong Kong, Sydney, London, New York, Los Angeles and San Francisco) combined from CY2016 to Q1CY2025. (Source: CBRE Report)

Its other income primarily comprises sources like: (i) interest income on fixed deposits, inter corporate deposit, on debentures, redeemable preference shares and compulsorily convertible preference shares, income tax/indirect tax refund, finance lease receivables (comprising income from fit-out rentals where such leases are classified as finance leases) and others (security deposits etc), (ii) gain on fair valuation of mutual funds and investments, (iii) gain on settlement of inter-company balances with related parties, (iv) profit on sale of PPE and investment property, (v) profit on sale of investments, (vi) sale of scrap, (vii) liabilities written back, (viii) provision written back in respect of deferred consideration, (ix) insurance claim received and (x) miscellaneous income.

The sponsors are Sattva Developers Pvt. Ltd., and BREP Asia SG L&T Holding (NQ) Pte. Ltd., while manager is Knowledge Realty Office Management Services Pvt. Ltd. Azis Trustee Services Ltd. is the Trustee for this ReIT.

ISSUE DETAILS/CAPITAL HISTORY:
The company is coming out with its maiden book building route IPO worth Rs. 4800.00 cr. for 480000000 units at the upper cap. The company has announced a price band of Rs. 95 – Rs. 100 per unit. The issue opens for subscription on August 05, 2025, and will close on August 07, 2025. The minimum application to be made is for 150 units and in multiples thereon, thereafter. Post allotment, units will be listed on BSE and NSE.

The company has allocated up to Rs. 1200 cr. worth of units for strategic Investors (not less than 5% and not more than 25% basis). From the rest, it has allocated not more than 75% for Institutional Investors and not less than 25% for non-Institutional investors. The company will utilize Rs. 4640.00 cr. for partial or full repayment/prepayment of certain financial indebtedness, and the rest for general corporate purposes. 

The joint Book Running Lead Managers (BRLMs) to this issue are Kotak Mahindra Capital Co. Ltd., Axis Capital Ltd., BofA Securities India Ltd., ICICI Securities Ltd., IIFL Capital Services Ltd., JM Financial Ltd., Morgan Stanley India Co. Pvt. Ltd., and SBI Capital Markets Ltd., while KFin Technologies Ltd. is the registrar to the issue. 

FINANCIAL PERFORMANCE:
On the financial performance front, for the last three fiscals, the company has posted a total income/net profit, of Rs. 3115.97 cr. cr. / Rs. 219.24 cr. (FY23), Rs. 3588.48 cr. / Rs. 339.66 cr. (FY24), Rs. 4146.86 cr. / Rs. 222.52 cr. (FY25). Its total outstanding as of July 02, 2025 stood at Rs. 20827.68 cr.

DIVIDEND POLICY:
The Manager shall declare and distribute at least 90% of the net distributable cash flows of the Knowledge Realty Trust as distributions (“REIT Distributions”) to the Unitholders. Such REIT Distributions shall be declared and made once every quarter in a Financial Year. Further, in accordance with the SEBI REIT Regulations, REIT Distributions shall be made within 5 working days from the record date. The record date is required to be two working days from the date of declaration of REIT Distributions, excluding the date of declaration and the record date. The REIT Distributions, when made, shall be made in Indian Rupees.

COMPARISON WITH LISTED PEERS:
As per the offer document, the company has shown Embassy Office Parks ReIT, Mindspace Business Parks ReIT, and Brookfield India Real Estate Trust ReIT as its listed peers.