Hiving off operational assets under InvIT structures can be an effective way to recycle equity and debt capital.
With a primary issuance of ~USD 165 million, this will reportedly be the largest InvIT in India’s RE sector, which could benefit significantly from capital recycling in light of the 250GW RE bidding trajectory announced in March 2023. Cash generated by SPVs housed under InvITs can also be upstreamed more tax-efficiently to investors.
RE developers in India have traditionally shied away from letting go of operational assets in a never-ending search for scale. Has the Indian RE sector now reached a level of maturity whereby considerations such as unwieldy scale and tax efficiency are increasingly coming into play?