Horizon Industrial Parks Limited, which is a leading industrial and logistics real estate platform, has formally made the initial significant move towards a public listing. The company, which is supported by the international investment giant, Blackstone, has submitted its Draft Red Herring Prospectus to the Securities and Exchange Board of India to initiate an initial public offering. The proposed offering will be designed to raise ₹2,600 crore and will be a positive step for the company towards consolidating its financial base as well as capitalizing on the increasing demand for modern industrial infrastructure in the country. The filing is an eventuality for the firm, which has experienced growth and expansion in its portfolio in the past few years.
The first public issue of Horizon Industrial Parks is carefully organized to involve the fresh issue of equity shares and the offer for sale by the current shareholders. As per the information given in the Draft Red Herring Prospectus, the fresh issue segment of the issue is likely to bring in approximately ₹1,100 crore of new capital into the company. Besides this new capital, there is also an offer to sell ₹1,500 crore worth of shares. The promoter selling shareholder, Horizon Industrial Parks Holdings Ltd, will carry out this part of the IPO.
The entity that does the promotion, Horizon Industry Parks Holdings Ltd, is an indirect subsidiary of funds managed by Blackstone Real Estate. This relationship underscores the institutional strength and international experience Blackstone has to offer to the platform. The IPO offers a balanced solution by delivering a mixture of fresh equity and exit or partial divestment to the promoter in an effort to raise growth capital, and in the same measure, enables the parent funds to monetize part of their investment. The equity shares that will be obtained as a result of this process will be offered at the two leading stock markets in the country, the BSE and the National Stock Exchange of India.
Horizon Industrial Parks has a well-defined and tactical plan on how to use the ₹1,100 crore that it is set to raise by the fresh issue of shares. A significant percentage of this amount has been allocated towards the handling of the current financial liabilities of the firm. The company will utilize around ₹825 crore to enable the repayment or prepayment of some of its borrowings that have been extended by Horizon Industrial Parks Limited and the various subsidiaries. This debt reduction deliberation is meant to streamline the capital structure of the company and minimize the burden of interest, which enhances the general financial condition.
The fresh issue balance will be used to fund the general corporate purposes. Such resources will give the company the flexibility it needs to sustain its current business operation requirements and even seek new growth opportunities as they present themselves. The efforts to consolidate high debt repayment with a stimulation of corporate liquidity will enable the company to align itself with long-term survival and competitiveness in the logistics and industrial park industry. This is the key financial plan of the company because it is in the process of becoming a publicly traded company after being a privately held company.
Horizon Industrial Parks is notable as being one of the most prominent logistics and industrial park platforms in India, especially in terms of the size of the lease area. The business model of the company is based on the overall management of high-quality industrial and logistical assets, their development and functioning.
Its cumulative portfolio is estimated to cover about 25.13 million square feet of leasable area, which is a colossal operational area. This portfolio is spread across ten major cities in India so that the company is present in the most important economic and industrial centres in the country.
The geographic coverage of business operations comprises major cities like Mumbai, Pune, Bengaluru, Chennai, Hyderabad and Delhi. In addition, the company owns units in Ahmedabad and the Farukhnagar region of Gurugram, among others.
This extensive allocation enables Horizon Indian industrial parks to accommodate a large range of tenants and industries, with the necessary infrastructure of logistics and production. The company can deal with such a major and geographically distributed portfolio, which indicates that the company has expertise in its operations and its platform is scalable in the Indian market.
Horizon Industrial Parks has taken a financial path that has seen a phenomenal increase in revenue and profitability. The company in the fiscal year ending March 31, 2024, showed revenue of operations of ₹384.45 crore, an astronomical rise in comparison with the ₹17.65 crore it showed in the 2022 fiscal year. What is even more impressive is that the net profit increased, and the net profit increased by a huge margin as it rose by ₹14.67 crore in fiscal 2022 and reached an impressive ₹1,540.23 crore in fiscal 2024. This enormous improvement in profits indicates the successful verticalization of business and the high valuation of industrial assets.
The occupancy rate is 95.8% as of the end of the past fiscal year, and this means that the company has a healthy and steady demand for its logistic and industrial spaces. The company has engaged a group of the top financial institutions as book-running lead managers to help it handle the complexities of the IPO. Such a team consists of Kotak Mahindra Capital, Citigroup Global Markets India, Jefferies India, HSBC Securities and Capital Markets (India), J.P. Morgan India, and JM Financial.
The submission of the Draft Red Herring Prospectus by Horizon Industrial Parks Limited is an important shift for the Blackstone-supported organization as it is set to become a publicly traded company. The company is making a decisive move to build its balance sheet and pay off its stakeholders by attempting to raise ₹2,600 crore by a combination of fresh equity and offer sale.
The outstanding revenue and profit growth between 2022 and 2024, as well as an almost full occupancy rate, would be a strong base for this public offering. With the company on the way to BSE and NSE listing, it is highly placed to capitalize on its position as an industry leader in the Indian industrial real estate segment.