Mumbai-based Macrotech Developers Ltd, erstwhile Lodha Developers, will open its IPO on April 7, in the price band of Rs 483-486 per share of the face value of Rs 10, each. The Rs 2,500-crore issue will close for subscription on April 9, 2021. This is the third time when the developer has come up with its IPO. Previously in September 2009, the company had tried to raise Rs 2,800 crore via IPO and later in 2018. However, the global recession forced it to shelve the issue in 2009, while it retreated in 2018 due to adverse conditions in the sector.
Who can bid how much in Macrotech Developers IPO?
Investors can bid for a minimum of 30 equity shares and in multiples of 30 shares thereafter, implying a minimum investment amount of Rs 14,580 per lot. Up to 50 per cent of the net issue will be reserved for the qualified institutional buyers (QIBs), 15 per cent for non-institutional investors and the remaining 35 per cent for the retail category. The employee reservation portion is of shares worth Rs 30 crore. This company has a core business in residential housing construction with focus on affordable mid-income housing range. Vishal Balabhadruni, Senior Research Analyst at CapitalVia Global Research, told Financial Express Online that the expansionary monetary policy and the growing real estate space are expected to have great potential for this company.
The main risks for Macrotech Developers are growing COVID cases, contingent liabilities and litigations (as shown in DRHP). “With Industry path positive this IPO seems to be a good avenue of investment,” Balabhadruni said. The book running lead managers to the issue are ICICI Securities, Edelweiss Financial Services, JM Financial, YES Securities (India), SBI Capital Markets and BOB Capital Markets. While the global co-ordinators book running lead managers are Axis Capital, JP Morgan India Private Ltd, Kotak Mahindra Capital Company Ltd. The registrar to the issue is Link Intime India Private Ltd.
Macrotech Developers listed peers
The listed peers are Brigade Enterprises Ltd, DLF Limited, Godrej Properties Ltd, Oberoi Realty Ltd, Prestige Estates Projects Ltd, Sobha Ltd and Sunteck Realty Limited. Among these, only Sobha Ltd has the lowest P/E ratio of 15.12, while Godrej Properties Ltd has the highest P/E ratio of 135.51.
Macrotech Developers has planned to utilise the net proceeds from issue towards reduction of the aggregate outstanding borrowings of the company on a consolidated basis, acquisition of land or land development rights, and general corporate purposes.