In a significant milestone for India’s real estate investment landscape, Embassy Office Parks REIT (Embassy REIT), India’s first listed REIT and Asia’s largest office REIT by area, has announced that it has successfully raised ₹2,000 crores through a 10-year Non-Convertible Debenture (NCD) issuance. This landmark deal makes Embassy REIT the first Indian REIT to issue 10-year NCDs, marking a pivotal shift in the country’s capital markets for long-tenor debt instruments.

The issuance, named Embassy REIT Series XV NCDs 2025, has been assigned a “AAA/Stable” rating by both CRISIL and CARE, reflecting the trust that credit rating agencies have in the REIT’s financial strength, operational stability, and governance standards. The deal was oversubscribed by 1.4 times, underlining strong demand from the institutional investor community.

Strategic Importance of the 10-Year NCD Issuance

This issuance stands out for several reasons. It is the first time a REIT in India has tapped the debt capital market with a 10-year structure, previously considered difficult due to the lack of investor appetite for longer maturities in the real estate sector. The NCD comes with a step-up coupon structure, starting at 7.25% for the first five years and increasing to 7.45% for the remaining five years, providing an effective yield of 7.33% over the 10-year period.

According to Embassy REIT’s CEO, Ritwik Bhattacharjee, “We are delighted to pioneer the first-ever 10-year NCD issuance in India’s REIT market and raise ₹2,000 crores from leading institutions. This transaction optimally staggers our liability profile and enables us to prudently manage future debt maturities.”

Who Invested in the Issuance?

The issuance saw broad-based participation from more than 15 large institutional investors, including:

• Life Insurance Companies

• Pension Funds

• Mutual Funds

The 10-year tenor matched the investment horizon of many of these institutions, making the instrument attractive for long-duration asset allocations. The issue was anchored by top-tier Life Insurers and Pension Funds, signifying a vote of confidence in both the issuer and the Indian REIT ecosystem.

Use of Proceeds: Refinancing and Interest Savings

Proceeds from this issuance will primarily be used to refinance certain existing debt obligations, resulting in annual interest cost savings of approximately 70 basis points. This move is aligned with Embassy REIT’s broader strategy of liability management, ensuring cash flow optimization and long-term financial sustainability.

The issuance structure also includes a put option at the 5-year mark, offering additional flexibility to both the issuer and investors. This hybrid mechanism balances the interests of risk management and return enhancement effectively.

Transaction Highlights

Here are the key metrics and milestones of this landmark issuance:

• ₹2,000 crore raised through Embassy REIT Series XV NCDs 2025

• 10-year tenor with an effective coupon of 7.33%

• Step-up structure: 7.25% for the first 5 years, 7.45% thereafter

• Put option available at the end of 5 years

• 1.4x oversubscription

• Rated “AAA/Stable” by CRISIL and CARE

• Participation from 15+ institutional investors

• Legal advisor: Talwar Thakore & Associates

Reinforcing Debt Market Maturity for REITs

This NCD issuance is being hailed as a watershed moment for India’s REIT landscape. It reflects growing market depth, investor confidence, and the evolution of long-tenor debt instruments in Indian capital markets. It also paves the way for other REITs and large infrastructure entities to explore similar structures for their funding needs.

Embassy REIT’s ability to tap the market with a 10-year instrument also demonstrates the credibility it has built over the years, especially in areas like governance, operational transparency, and asset quality. With more than 40.3 million square feet of completed operating assets, it remains one of India’s most resilient real estate platforms.

About Embassy REIT

Embassy Office Parks REIT is the first publicly listed REIT in India and currently holds the title of Asia’s largest office REIT by area. Its portfolio consists of:

• 51.1 million square feet (msf) of total area

• 40.3 msf of completed operating space

• Assets across Bengaluru, Mumbai, Pune, Chennai, and NCR

• 272 global occupiers, including Fortune 500 companies

• Strategic amenities including:

  • 4 operational business hotels

  • 2 under-construction hotels

  • 100 MW solar park supplying renewable energy to tenants

The REIT is known for its industry-leading ESG initiatives and has been recognized by global institutions, including:

• 5-star rating from the British Safety Council

• 5-star GRESB rating

• Inclusion in the 2023 Dow Jones Sustainability Indices

This recognition marks it as the first REIT in India to be acknowledged by such global benchmarks for sustainability and governance excellence.

Legal and Compliance

The issuance was carried out under the strictest regulatory oversight, with Talwar Thakore & Associates acting as legal counsel. Embassy REIT continues to comply with all SEBI REIT Regulations, ensuring that the interests of unit holders, lenders, and stakeholders remain protected.

Forward-Looking Outlook

With this successful issuance, Embassy REIT is likely to continue setting benchmarks for the Indian REIT market. The company has shown that long-tenor capital can be accessed efficiently by REITs that have strong credit fundamentals, stable cash flows, and investor trust.

As India’s REIT market matures and the government continues to focus on infrastructure and financial deepening, this transaction could serve as a template for future long-term issuances, not just by REITs but also by InvITs and large corporate borrowers seeking patient capital.

Conclusion

Embassy REIT’s ₹2,000 crore, 10-year NCD issuance marks a historic turning point for the Indian REIT market. It not only enhances Embassy REIT’s own capital structure and cost efficiencies but also opens the door for long-duration capital access in India’s growing real estate and infrastructure finance ecosystem. With its AAA credit ratings, strong governance, and market-leading ESG track record, Embassy REIT continues to solidify its position as a pioneer and leader in the Indian REIT space.

The Upcoming IPOs in this week and coming weeks are M&B Engineering, Cash Ur Drive Marketing, Renol Polychem, Jyoti Global Plast, Takyon Networks, Mehul Colours, Aditya Infotech, Sri Lotus Developers & Realty, Lakshmi India Finance, Jyoti Global Plast, B.D. Industries (Pune), Kaytex Fabrics, Umiya Mobile, Repono, NSDL.

The Current active IPO are Shree Refrigerations, Sellowrap Industries, Shanti Gold International, Patel Chem Specialities, Brigade Hotel Ventures, Indiqube Spaces, GNG Electronics, TSC India.

Start your Stock Market Journey and Apply in IPO by Opening Free Demat Account in Choice Broking FinX.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst.