Opening Bell Rings for Knowledge REIT IPO: Jhunjhunwala-Backed Trust Seeks to Rewrite India’s Real Estate Investment Landscape

August 5, 2025 marks a milestone on Dalal Street as the Knowledge Realty Trust REIT, strongly backed by the Rakesh Jhunjhunwala Trust, launches its much-anticipated initial public offering. This issue is poised to become India’s largest office REIT and has already drawn remarkable interest from institutional and retail investors alike.

IPO Structure and Subscription Details

The Knowledge REIT IPO opens for subscription from August 5 to August 7, 2025, aiming to raise Rs 4,800 crore solely through fresh issuance.

Units are offered within a price band of Rs 95 to Rs 100 per unit. The minimum bid size is 150 units, translating to a starting investment of approximately Rs 15,000 for retail investors.

The allotment is expected to be finalized on August 12, with listing set for August 18 on both the NSE and BSE exchanges.

The IPO has already garnered Rs 1,620 crore from anchor investors in a pre-issue round. Prominent backers include LIC (marking its maiden REIT investment), Jhunjhunwala Trust, Tata AIG, Nippon MF, Axis MF, global heavyweights like Amundi and Wells Capital, among over 50 major institutions.

How the Issue is Allocated

Institutional buyers are earmarked for 75% of the issue, while the remaining 25% is dedicated to non-institutional and retail investors.

Previous pre-IPO placements, totaling Rs 1,400 crore, reduced the public issue size from the initial Rs 6,200 crore, reflecting robust early support from high-net-worth individuals and family offices.

Where the Funds Go

Proceeds are slated for repaying debt, acquiring stakes in prime office assets spread across India, and for general corporate purposes.

Strategic deleveraging will slash the REIT’s loan-to-value ratio to just 19%, the lowest among Indian REITs. This strengthens growth prospects and offers financial flexibility for future acquisitions.

Portfolio Snapshot: India’s Largest Office REIT

Knowledge Realty Trust will control over 46 million square feet of Grade A office assets in 29 properties across six key cities, including Mumbai’s One BKC, Bengaluru’s Cessna Business Park, and Hyderabad’s Knowledge City and Park.

The REIT’s portfolio boasts a Gross Asset Value near Rs 62,000 crore and net operating income of Rs 3,432 crore in the previous financial year, confirming its position as the country’s largest by value.

Anchor sponsors Blackstone and the Sattva Group provide global clout, strong governance, and a proven track record in commercial real estate.

Why Investors Are Watching

The REIT model offers exposure to rent-yielding commercial real estate without the need to own physical property, appealing to India’s rapidly maturing investor base.

Market experts note the robust visibility for stable cash flows thanks to long-term tenancy agreements, strategic asset locations, and a diversified tenant portfolio.

Early anchor participation by market icons like the Jhunjhunwala Trust and LIC instills confidence, with demand expected to remain high throughout the subscription window.

Looking Forward

As the fourth REIT to list in India after Embassy, Mindspace, and Brookfield, Knowledge REIT’s debut could set new benchmarks for the sector, especially with its aggressive growth plans and investor-friendly governance standards.

The issue’s book-building and allocation processes are in complete compliance with SEBI’s REIT regulations, offering transparency and orderly access to both institutional and non-institutional participants.

Source: Economic Times, Rediff Money, Financial Express, Times of India