Mumbai’s redevelopment market is coming into focus as Pranav Constructions opens its initial public offering (IPO) for subscription today, September 7. The company has fixed the price band at Rs 118-124 per share for the Rs 351-crore issue.

The public issue will remain open from September 7 to September 9. Let’s take a look at the key details of the issue that every investor needs to know –

Pranav Constructions IPO: What is on offer?

The IPO combines a fresh issue with an offer for sale (OFS). The fresh issue will raise around Rs 315.6 crore, while existing investor shareholder BioUrja India Infra will sell 28.57 lakh shares through the OFS for around Rs 35.43 crore.

This takes the total issue size to Rs 351 crore.

In a fresh issue, the money raised goes to the company. In an OFS, the proceeds go to the existing shareholder selling the shares.

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The company has proposed listing its shares on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

Pranav Constructions IPO: What does the GMP indicate?

The unofficial market is currently pointing to some gains.

Pranav Constructions’ IPO is commanding a grey market premium of around Rs 44, or about 35.48% over the upper end of the price band.

However, GMP is not an official market indicator. It can move before listing and does not guarantee where the stock will actually debut.

Pranav Constructions IPO: How much money does a retail investor need?

The IPO has a minimum lot size of 120 shares.

At the upper price of Rs 124, a retail investor would therefore need Rs 14,880 for one lot. Further applications can be made only in multiples of 120 shares.

Each equity share has a face value of Rs 10.

Pranav Constructions IPO: Where will the IPO proceeds go?

A large part of the fresh issue proceeds will be used for Pranav Constructions’ redevelopment projects.

The company plans to spend the money on government and statutory approvals, buying additional Floor Space Index (FSI) and providing alternate accommodation compensation to members of redevelopment projects.

Some funds will also be used for hardship compensation related to under-construction and upcoming projects.

The company plans to use part of the proceeds to repay debt and acquire future redevelopment projects. The remaining amount will be used for general corporate purposes.

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What is Pranav Constructions’ business?

Pranav Constructions operates mainly in Mumbai’s redevelopment market.

Its focus is on projects within the Municipal Corporation of Greater Mumbai (MCGM) region and the western suburbs of the city.

The company works across different housing segments, ranging from economical and mid-market homes to mass-market and aspirational residential projects.

Pranav Constructions IPO: Key players of the issue

Centrum Capital and PNB Investment Services are the book-running lead managers for the issue.

Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.