Bengaluru: Hillhouse Investment-backed Elevate Campuses Ltd, a student accommodation and K-12 platform, will hit the primary market with its ₹2,100-crore initial public offering (IPO) on 23 September, marking the first-ever public listing in this emerging and fragmented real estate asset class in India.
“The IPO is a pivotal moment for the sector because this unique, resilient asset class is now being priced in Indian public markets,” Narasimha Jayakumar, CEO, Elevate Campuses, told Mint in an interview.
“It acts like ‘REIT Plus’ with predictable annuity income and solid growth. Overseas, this is an established asset class with companies such as American Campus Communities, Harrison Street, Greystar in the US, and Unite Students on the London Stock Exchange,” Jayakumar added.
The three-day public issue will close on 25 September. The IPO comprises an entirely fresh issue of equity shares, with no offer-for-sale (OFS) component.
The IPO proceeds will be used to acquire a portfolio of domestic school assets from promoter affiliates to bring them under the Elevate umbrella, repay debt and meet general corporate requirements.
“Elevate will be India’s first institutionalized, listed player in this space,” Jayakumar said.
Elevate Campuses owns, operates and manages on-campus student accommodation across institutes and owns K-12 assets across cities. The business operates under the “Good Host Spaces” and “ScholarZ” brands for student accommodation and manages K-12 assets under long-term lease arrangements with K-12 operators.
The timing of Elevate Campuses’ IPO couldn’t be better. The recent collapse of a paying-guest (PG) building in Delhi’s Satya Niketan laid bare the urgency of creating organized student housing across the country.
Shobhit Agarwal, CEO, Anarock Capital says unlike India, student housing is an established alternative asset class in more mature economic globally.
“Just like Reits opened up a new real estate segment in the country, Elevate’s IPO is likely to do the same for the student housing space. There is a huge opportunity to scale given that it is still a largely fragmented sector. With an institutional investor such as Hillhouse leading it, if the IPO does well, there will be more firms encouraged to go public,” Agarwal added.
As a nuanced and vital sub-segment within broader shared living or co-living, student housing is meant to offer managed or purpose-built accommodation (PBSA) for higher-education students.
The country has about 43.3 million students enrolled in around 58,600 higher-education institutions. However, professionally managed student accommodation serves less than 0.5% of total enrolments, compared with 13-15% in the US and 17-19% in the UK.
The higher-education sector in India is emerging as one of the world’s largest institutional opportunities, said a February report from Anarock Capital. Nearly 30,000 acres of new campus land and about 2.7 billion sq. ft of academic infrastructure are set to be developed to meet surging student demand. This massive expansion underscores the urgent need for student housing at scale.