Ascendas India Trust

Ascendas India Trust is a property developer trust which deals primarily in IT parks in India. It currently own 4 tech parks in 3 states. Each of these tech parks have additional land available for development. At the moment, they are developing 3 of such lands which will increase its land space by a quarter ! These developments will be ready in 2011.

At the moment, Ai-Trust is trading at 7.3% yield. It might be an interesting purchase if you believe current rental rates can hold and the 3 on-going organic developments can increase its distributable income by at least 10%.

(Not Vested)

This stock have gotten beaten down. Is there a reason for it?

We know currency movement is reducing the dividend payout. However currently yielding 9.40%. Free hold lands.

Anyone can see possible risks at this price?

(05-10-2011, 01:12 PM)Drizzt Wrote: This stock have gotten beaten down. Is there a reason for it?

We know currency movement is reducing the dividend payout. However currently yielding 9.40%. Free hold lands.

Anyone can see possible risks at this price?

It is not just AIT that has been beaten down. look all the other REITs too . Investors are worried about rights issue as seen in the last financial crisis and now as evidence by LMIR recently.AIT has the additional issue of CAPITAL group selling its stake.

Main risk - http://sg.finance.yahoo.com/echarts?s=SG...off;source=;

i wonder why capital group will sell down like that. i heard they have some acquistions. perhaps the investors do not like that move?

Share Price may be under pressure today,

ASCENDAS INDIA TRUST PRIVATE PLACEMENT

The Issue Price of S$0.72 per New Unit represents a discount of 9.2% to the adjusted volume weighted average price of S$0.7933 per Unit for trades in the Units done on Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the full Market Day on 27 September 2012.

Closed @ $0.82 yesterday...


<Not Vested>

Current shareholders will not welcome this private placement. The stock px after it resumes trading confirms that. There are too many unanswered questions.

- Why do they issue shares at a discount?
- Why dont they allow current shareholders to participate in this fund raising exercise?
- The amount raised is $100 million max. Why cant they borrow from banks?
- If the properties they are buying is that good (in terms of returns), why are banks not keen to do business with them?

(28-09-2012, 05:03 PM)level13 Wrote: Current shareholders will not welcome this private placement. The stock px after it resumes trading confirms that. There are too many unanswered questions.

- Why do they issue shares at a discount?
- Why dont they allow current shareholders to participate in this fund raising exercise?
- The amount raised is $100 million max. Why cant they borrow from banks?
- If the properties they are buying is that good (in terms of returns), why are banks not keen to do business with them?

This is my guess -

1) They need to raise substantial equity and the only way to attract institutional interest is to offer shares at a discount.

2) The sponsor and substantial shareholders may not be keen to participate in fund raising exercise. They did mention that the acquisitions will lead to DPU growth so there might not be dilution to DPU.

3) The current gearing is 33% and additional bank borrowings of $91 million will exceed the self imposed 40% gearing cap. This makes equity fund raising necessary if they wish to grow their asset size.

Personally, I like the idea of owning freehold properties in business districts of a growing Asian country and Ai-Trust do own substantial land bank as well. But the high inflation is certainly a damper to their DPU.

http://aitrust.listedcompany.com/newsroo...DC98.1.pdf [SGX Announcement]

They have successfully placed out 139 million units at $0.720 to raise $100 million cash. It was 2.6 times subscribed implying strong interest in this business trust at that price offering.

If the share price drops to $0.720 and using annualized 1Q 13 DPU of 1.20 cents (90% payout), the dividend yield is 6.6%.

(Not Vested)

i always think that the interests of most reit fund managers and shareholders are not aligned. i always wonder that if they own more than 80% of the company, will they ever issue shares at a discount?

Agree with Nick that inflation and currency exchange rates can be a damper on this stock. Was vested since 2008 but have since let everything go a couple of weeks back.