NDRWPL Equity

pending

IFC is considering (i) an equity investment of up to US$25 million (INR equivalent) and (ii) a debt investment facility of up to US$25 million (INR equivalent) in NDR Smart Spaces Private Limited (“NDR Smart ” or “Company”)),a subsidiary of NDR Warehousing Private Limited (“NDRWPL”). Both investments will be made at the corporate level of NDR Smart and will be used primarily for new warehousing development activities, purchase of warehouses under development, including land procurement (voluntary transactions) for future warehouse construction, repayment of select project loans, and general corporate purposes. NDRWPL (https://www.ndrwarehousing.com), established in 1986, is the second-largest warehouse developer in India by volume and has developed approximately 19 million sqft of warehousing space & maintains a pipeline of an additional 25 million sqft across multiple states in India. NDRWPL has incorporated NDR Smart and is in the process of demerger and to transfer its warehouse development business to NDR Smart for simplified administration and management. Post-demerger, NDR Smart will house all warehouse development activities and management of the Project Manager while NDRWPL will continue primarily as the Sponsor of NDR InvIT and Investment Manager. NDRWPL will continue shareholding in: (a) NDR InvIT Trust, which houses operating warehouses & IFC has an existing debt investment (#49975) undertaken in December 2024; and (b) NDR InvIT Managers Pvt. Ltd. (the “Investment Manager” or “IM”). While NDR Smart will among others include Under development SPVs which houses residential/ commercial assets, this IFC investment will be limited to: (a) under-construction & under-development Special Purpose Vehicles (“SPVs”) that house warehousing assets of NDR Smart; and (b) the project manager (PM) also referred to as NDR Asset Management Pvt.Ltd (NDR AMPL). NDR Smart will require IFC’s prior consent to invest in any commercial projects or to undertake residential construction. Residential plotting of excess land (without construction) may proceed without consent, provided it remains limited to subdivision & sale & does not entail material capital expenditure. The warehousing business follows a develop-to-core business model that involves purchasing dry land from private parties on a willing buyer willing seller basis, developing Grade-A warehouses, and securing potential tenants during construction stage. Each warehousing asset are held under separate SPVs and once commissioned are transferred to NDR InvIT. NDR InvIT primarily owns and operates completed and leased warehouse assets; however, as per Securities & Exchange Board of India regulations, it may undertake limited construction or development activities amounting to up to 20 percent of InvIT net asset value. Such activities will typically involve extensions or improvements within existing land area mapped to SPVs & do not entail Greenfield development or new land acquisition. The construction is generally handled through PM. At present, there are 23 assets at various stages of development 16 at site finalization, 3 at pre-construction, 3 under construction, & one at commissioning. The company plans to have multiple other projects of warehouse construction & handing over completed assets to NDR InvIT. Typical timeline for completion of the whole process is: a) land identification (0-6 months) b) pre construction (3 months)c) construction (6-9 months) & d) improvement as per tenant requirements (2-3 months). Marketing for potential tenants is undertaken in parallel during construction stage, including customer proposals, letters of intent, & lease agreements. Upon completion & substantial leasing, the operational warehouses (as standalone SPVs) are transferred to the NDR InvIT. The key operations & interlinkages between relevant warehousing SPVs under NDR Smart (and NDRWPL during the ongoing demerger) and NDR InvIT in the context of IFC investment include: (1) NDR Smart Corporate Team (supporting newly formed warehousing SPVs): The development process begins with land identification, & voluntary land procurement. The project phase includes pre-construction activities (budgeting, land clearance, surveying, leveling, & compaction), followed by construction activities such as site preparation, foundation & structural works, Mechanical Engineering & Plumbing installation, interior fit-outs, & safety measures; (2) Transfer of operational assets to NDR InVIT: Upon completion & substantial leasing, the fully operational & de-risked warehouses (as standalone SPVs) are transferred to the NDR InvIT Trust under a Right of First Offer arrangement; and (3) NDR AMPL staff supports NDR Smart (and NDRWPL during the transition) during the construction phase through site-level supervision. Once construction is complete & assets are transferred, NDR InvIT appoints NDR AMPL as the PM, responsible for warehouse operations and maintenance (O&M), primarily including management of common infrastructure and services such as fire safety systems, housekeeping, landscaping, water and energy supply, security, internal roads, parking, sewage treatment, and tenant coordination.