Mumbai-based Macrotech Developers Ltd, erstwhile Lodha Developers, is trying luck for the third time to raise money from capital markets in an IPO, with a proposed Rs 2,500 crore public issue
Macrotech, on Tuesday filed a draft red herring prospectus for the initial public offering. Image: Reuters
Mumbai-based Macrotech Developers Ltd, erstwhile Lodha Developers, is trying luck for the third time to raise money from capital markets in an IPO, with a proposed Rs 2,500 crore public issue. Macrotech, on Tuesday filed a draft red herring prospectus for the initial public offering. This is the third attempt when the developer has proposed its IPO. The company previously tried to raise Rs 2,800 crore via IPO in September 2009 and later in 2018. The global recession forced it to shelve the issue in 2009, while it retreated in 2018 due to adverse conditions in the sector.
Gaurav Garg, Head of Research, CapitalVia Global Research Limited, told Financial Express Online that the company saw increased demand in the premium and luxury residential segment during the quarter with bookings of Rs 1,000 crore. Bookings worth Rs 1,500 crore were seen in the middle-income and affordable segments. “With a well-established brand value and diversified portfolio in both the residential and commercial sectors, the company may be successful in raising the funds through IPO this time,” Garg said.
Macrotech Developers Ltd plans to utilise the net proceeds from the issue for reduction of the aggregate outstanding borrowings of the company on a consolidated basis, acquisition of land or land development rights; and general corporate purposes. 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 Sobah Ltd has the lowest P/E ratio of 15.12, while Godrej Properties Ltd has the highest P/E ratio of 135.51. As of nine months ended December 31, 2020, Macrotech Developers reported a profit of Rs 264.3 crore, while in the financial year 2020, it posted a profit of Rs 744.8 crore.
The book running lead managers to the issue are ICICI Securities, Edelweiss Financial Services Ltd, IIFL Securities Ltd, JM Financial Ltd, Yes Securities India Ltd, SBI Capital Markets Ltd and BOB Capital Markets Ltd. While the registrar to the Lodha Developers is Link Intime India Private Ltd. According to the Anarock report, Macrotech Developers is the largest real estate developer in India by residential sales value for the financial years 2014 to 2021. Its core business is residential real estate developments with a focus on affordable and mid-income housing.
The real estate market in India has grown at a CAGR of approximately 10 per cent from $ 50 billion in 2008 to $120 billion in 2017, and is expected to further grow at a CAGR of 17.7% to reach $1 trillion by 2030. The real estate market contributed approximately 6 per cent to India’s GDP in 2017 and is likely to contribute approximately 13% to India’s GDP by 2025.