Mumbai’s luxury housing market is making its way to Dalal Street, as Sri Lotus Developers kicks off its Rs 792 crore IPO today, July 30. The company is raising the funds primarily for its ongoing projects and general corporate purposes. This is entirely fresh shares in this issue. As the IPO opens for subscription, the main question comes is – Does it merit your money? Let’s take a breakdown of the IPO from price details and financials to brokerages take on the issue –
Sri Lotus Developers IPO: Dates, size and structure
A mainboard issue, the IPO opened for subscription on July 30 and will close on August 1. It comprises a total fresh issue of 5.28 crore equity shares. The company is planning to raise Rs 792 crore.
Out of the total proceeds, Rs 550 crore is placed for investments in subsidiaries involved in ongoing luxury projects, while the remaining Rs 242 crore is allocated for general corporate purposes. After the issue, promoter holding will reduce from 91.81% to 81.9%.
Sri Lotus Developers IPO: Price band
The price band for the IPO has been fixed between Rs 140 to Rs 150 per share. The IPO is offering a minimum lot size of 100 shares. This translates to a minimum investment of Rs 15,000 at the upper end.
Sri Lotus Developers IPO: GMP buzz
As per the latest , the grey market premium (GMP) for Sri Lotus Developers stood at Rs 44 on the opening day. This indicates a potential listing gain of around 29%. As of now, the estimated listing price is Rs 926 per share.
Sri Lotus Developers IPO: Business model
Sri Lotus Developers is based in Mumbai and focuses mainly on ultra-luxury and luxury redevelopment projects in the city’s western suburbs like Andheri, Juhu, and Bandra.
Its asset-light model is working mostly via joint development and management development (MD) agreements.
As of the latest, it currently has 13 ongoing or planned projects covering 16.9 lakh square feet of saleable area. Furthermore, the company also plans to expand into premium micro-markets such as Prabhadevi and Nepean Sea Road.
Sri Lotus Developers IPO: Financial performance
Looking at the financial health of the company, it has reported a sharp rise in profits over the last three financial years.
In FY25, the company posted a PAT of Rs 228 crore, up from Rs 119 crore in FY24 and Rs 17 crore in FY23. Its revenue touched Rs 550 crore in FY25, compared to Rs 462 crore and Rs 167 crore in the two preceding years.
Its EBITDA margin also jumped from 12.8% in FY23 to 52.6% in FY25.
Sri Lotus Developers IPO: What brokerages are saying
Several brokerage firms have weighed in on the IPO, offering mostly positive views but with valuation caveats.
Bajaj Broking notes, “On the financial performance front, for the last three fiscals, the company has (on a consolidated basis) posted a total income/net profit of Rs 169.95 crore / Rs 16.80 crore (FY23), Rs 466.19 crore / Rs 119.14 crore (FY24), and Rs 569.28 crore / Rs 227.89 crore (FY25). If we attribute FY25 annualized earnings, then the asking price is at a P/E of 32.19. Based on FY24 earnings, the P/E stands at 61.48.”
Deven Choksey Research said in its IPO note, “With its initial issue, the Company plans to raise ~INR 7.9bn through issue of fresh equity, to fund investment of ~INR 5.5bn in its subsidiaries and rest of ~INR 2.4bn for general corporate purposes.”
“Lotus Developers’ initial issue is priced at 24.5x FY25 EBITDA, higher than its peer average of 20.7x FY25 EBITDA. Given its strong growth, asset-light business model, and superior return profile, we believe the Company demands premium over its peers and believe value in its initial offering. We assign a ‘SUBSCRIBE’ rating to its initial issue,” added the brokerage.
Anand Rathi also echoed a similar view, assigning a “SUBSCRIBE” rating and citing the company’s growth strategy and premium positioning in Mumbai’s housing market. “At the upper price band company is valuing at P/E of 30.6x to its FY25 earnings, with EV/EBITDA of 24.5x and market cap of Rs 73,306 million post issue of equity shares. We believe that the IPO is fully priced and recommend a “Subscribe- Long Term” rating to the IPO,” the brokerage noted.