The initial public offering (IPO) of Mumbai-based realty player Arkade Developers Ltd. opens for subscription on Monday, September 16, and closes on September 19. In the grey market, the issue is trading at a 62.5% premium or ₹80 above the upper limit of the price band.
Ahead of the IPO opening, Arkade Developers has raised ₹122.40 crore from anchor investors. The allocation was made to nine investors like Societe Generale, Intuitive Alpha Investment Fund PCC- Cell 1, Saint Capital Fund, and Visionary Value Fund, among others.
Arkade Developers IPO review
Analysts mostly have a ‘Subscribe’ rating on the IPO, as the issue is available at a reasonable valuation which appears less than peers.
The brokerage has assigned a ‘Subscribe’ rating to this IPO, as the company is a leading player and an established developer in, MMR, Maharashtra. Also, it is available at a reasonable valuation as compared to its peers.
“The issue appears to be attractively priced given the excellent execution track record, healthy market share in the identified micro-markets, strong balance sheet and the growth potential of the real estate industry in the MMR. The funds raised through the IPO will be utilised for acquiring land parcels which will further boost the development pipeline, said SBI Securities while recommending a ‘Subscribe’ rating to the issue for both listing gains as well as long-term investment horizon.
The company’s business growth strategy, along with its near debt-free status and consistent on-time project delivery, positions Arkade Developers for sustainable growth in the future. Thus, the brokerage recommended a ‘Subscribe’ rating for this issue.
Arkade Developers IPO details
The price band for the IPO has been fixed at ₹121-128 a share. Investors can bid for a minimum of 110 shares in one lot and in multiples thereof.
At the upper end of the price band, Arkade Developers will have a post-listing market capitalisation of ₹2,376 crore.
The company is aiming to raise ₹410 crore via the IPO.
The maiden public issue is entirely through a fresh issue of equity shares worth ₹410 crore with no offer-for-sale (OFS) component. The company has already raised ₹20 crore through a pre-IPO placement round.
About 50% of the issue size or shares worth ₹204 crore have been reserved for Qualified Institutional Bidders (QIB), while 15% of the issue or shares worth ₹61 crore are reserved for Non-Institutional Investors.
Shares worth ₹143 crore or 35% of the IPO size are reserved for retail investors.
The proceeds from the fresh issue will be used for the development of the company’s ongoing as well as upcoming projects and funding the acquisition of future real estate projects and general corporate purposes.
Arkade Developers is a fast-growing real estate development company with a significant presence in Mumbai. As of July 31, 2023, it has developed 1.80 million square feet of residential property, including through partnership entities in which Arkade holds the majority stake.
Between 2017 and Q1 2023, the company launched 1,040 residential units and sold 792 residential units in different markets in the Mumbai Metropolitan Region (MMR) in Maharashtra.
Arkade Developer’s revenue in fiscal 2023, 2022 and 2021 stood at ₹224 crore, ₹237 crore and ₹113 crore, respectively.
Unistone Capital is the sole book-running lead manager (BRLM), while Bigshare Services Pvt Ltd is the registrar for the issue.
The allotment for the Arkade Developers IPO is expected to be finalised on September 20, 2024. Arkade Developers IPO will be listed on BSE and NSE with a tentative listing date fixed as September 24, 2024.
