Mindspace Biz Parks REIT Raise 100 Crore INR Through CPS Offering

Mindspace Business Parks REIT, which is managed by K Raheja Corp and issued commercial papers, is the first real estate investment trust in India to do so since the capital markets regulator permitted the use of this instrument by REITs earlier in 2022.

The REIT has raised short-term financing with a three-month maturity at an annual interest rate of 7.2%.

A FIRST FOR A REIT:
In September 2022, REITs were granted regulatory clearance to issue commercial paper.

The cash will be used for the working capital needs of the asset special purpose entities of Mindspace REIT.

In September 2022, the Securities and Exchange Board of India (Sebi) permitted REITs and infrastructure investment trusts (InvITs) to issue Commercial notes in order to raise capital. This action created a new route for REITs to raise capital via shorter-tenor instruments with possibly cheaper interest rates and quicker deadlines.

After successfully exploring capital market fund-raising via the issue of numerous debentures, Mindspace Business Parks REIT is pleased to be the first Indian REIT to raise money using commercial papers, according to CEO Vinod Rohira.

This is a component of our wider plan to diversify our lender base and improve the borrowing rates and maturity profile of our well-spaced loan portfolio.

According to him, as part of the REIT's bigger ESG commitment, it would also investigate the possibility of issuing green bonds to generate capital.

With this offering, Mindspace REIT has expanded its debt profile. At the time of its IPO in August 2020, all of Mindspace REIT's borrowings at the special purpose vehicle level were bank borrowings.

Over the last two years, Mindspace Business Parks REIT has diversified its lender portfolio and decreased its borrowing costs via the issuing of numerous fixed-cost debentures that are predominantly subscribed to by mutual funds, pension funds, and insurers.