Information on the Target

Investcorp has announced that its portfolio company, NDR Warehousing Private Limited, has successfully listed the NDR Infrastructure Investment Trust ("NDR InvIT") on the National Stock Exchange of India. This marks the launch of India's first perpetual warehousing and industrial parks infrastructure investment trust, akin to a Real Estate Investment Trust (REIT).

The initial public offering (IPO) for the NDR InvIT procured total proceeds of $106 million, comprising $23 million from an offer for sale and $83 million from a primary issue. Notably, the shares listed at a premium of 4% over the issue price, and the IPO was fully subscribed and closed on the same day.

Industry Overview in India

India's logistics and warehousing sector is rapidly evolving, driven by the country's status as one of the fastest-growing major economies globally. The demand for warehousing solutions has surged as e-commerce expands and businesses diversify their supply chains. Such growth is supported by significant government investments in infrastructure, which aim to enhance connectivity and efficiency across various regions.

The warehousing market across the 12 cities where NDR InvIT operates showcases robust performance attributed to several factors, including the increasing demand for space and contracted revenue streams backed by long-term tenant agreements. This landscape positions warehousing as a crucial element in the broader logistics ecosystem, significantly influenced by the rise of online retail.

Moreover, environmental sustainability and technology adoption have become central to the industry, prompting companies to invest in state-of-the-art facilities that meet modern requirements. As businesses look to optimize operations, opportunities arise for well-structured investment vehicles like the NDR InvIT to deliver favorable returns.

The Rationale Behind the Deal

This IPO and the establishment of the NDR InvIT are part of Investcorp’s strategy to tap into the promising logistics and warehousing sector in India. The trust's strategic positioning in high-demand submarkets, coupled with its diversified asset base, allows for scalability and resilience against market fluctuations.

Furthermore, the successful listing enhances liquidity and provides the trust with the capital necessary for future expansions and the development of new projects, which is vital for capturing ongoing market momentum.

Information About the Investor

Investcorp is a prominent alternative investment firm known for its global reach and extensive portfolio across various asset classes. With a commitment to the Indian market, the firm is aiming to grow its assets under management in India to $5 billion in the medium term.

Having a rich history of investments in warehousing on an international scale, predominantly in the US and UK, Investcorp's expansion into the Indian logistics market is a strategic move that leverages its expertise. The firm is committed to improving its position in the mid-market private equity space and has a diversified investment footprint, covering sectors such as consumer tech, healthcare, and financial services.

View of Dealert

The listing of the NDR InvIT represents a significant milestone for both Investcorp and the Indian warehousing sector. From an investment perspective, the deal exhibits several positive indicators, including high demand in the market, a diversified asset portfolio, and strong growth prospects stemming from e-commerce expansion.

Moreover, gaining an entry into a burgeoning market like India through such an innovative vehicle as an InvIT provides an appealing risk-return profile. As Investcorp continues to capitalize on India’s economic growth, the investment is likely to yield substantial dividends for stakeholders.

Ultimately, the success of the NDR InvIT could pave the way for further investments in similar projects, hence enhancing the overall attractiveness of India's warehousing sector to both domestic and international investors. Therefore, this investment appears promising, embodying both growth potential and a proactive approach to market demands.

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