Blackstone to sell up to $1.25 billion stake in India's Knowledge Realty Trust

Offer for sale structure and pricing

Blackstone is set to sell up to 11.1 million units, representing 25.03% of the unit capital of Knowledge Realty Trust, through an offer for sale (OFS) on Indian stock exchanges. The base offer comprises up to 740 million units, or 16.69% of unit capital, with sellers holding an option to place an additional 370 million units (8.34%) in the event of oversubscription. The floor price has been set at 108 rupees per unit, a 4.7% discount to the prior session's close and a 13% discount to net asset value.

At the floor price, the maximum deal is valued at Rs 11,988 crore (around $1.25 billion), with the base deal sized at roughly Rs 79.9 billion (about $838 million) and a Rs 39.96 billion greenshoe option. The OFS is being executed by BREP Asia SG L&T Holding (NQ) Pte. Ltd., BREP Asia SG DRPL Holding (NQ) Pte. Ltd., BREP Asia II Indian Holding Co IV (NQ) Pte. Ltd. and BREP Asia II Indian Holding Co VII (NQ) Pte. Ltd. and is intended to meet the minimum public unitholding requirement under Regulation 14(2A) of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014.

Timing, exchanges and post-sale ownership

The offer is scheduled to open on Aug. 31 for non-retail investors and Sept. 1 for retail investors, and will be conducted over two trading days on BSE and NSE. Blackstone and related entities currently hold a 46.5% stake in the trust. If the greenshoe is exercised in full, that holding would decline to 21.5%, making joint venture partner Sattva Group the largest unitholder with a 32% stake. Knowledge Realty Trust, which listed in August of the prior year, holds a current portfolio of 29 business corporate parks across six Indian cities.

Significance of the transaction

The OFS is described as Blackstone's largest such transaction in India this year and reduces the sponsor's control position while expanding the trust's public float to comply with REIT regulations. The pricing terms — a discount to both market price and net asset value — and the dual-tranche structure across institutional and retail investors shape the absorption dynamics for one of the year's biggest Indian REIT placements.