Macrotech Developers IPO subscribed 26% on day 1; QIB portion booked 58%

Updated : April 07, 2021 08:16 PM IST

The offer has received bids for 95.91 lakh equity shares so far as against the offer size of 3.64 crore equity shares.

The initial public offering (IPO) of Lodha Group’s Macrotech Developers has been subscribed 25 percent on April 7, the first day of bidding. The company plans to raise Rs 2,500 crore through its public issue which will close on April 9.

The offer has received bids for 95.91 lakh equity shares so far as against the offer size of 3.64 crore equity shares, as per the subscription data available on exchanges.

The portion set aside for retail investors has been booked 15 percent, while that of qualified institutional buyers has been subscribed 58 percent. Non-institutional investors have put in bids for 11 percent of the reserved portion and employees’ portion is booked 4 percent on day 1.

The company reduced the offer size to 3.64 crore equity shares from 5.16 crore after it raised Rs 741 crore from anchor investors on April 6.

Macrotech Developers is amongst the largest real estate developers in India by residential sales value for fiscal 2014 to 2020. As of December 31, 2020, it has completed approximately 77.2 million square feet of developable area across 91 projects. It has 54 ongoing and planned projects having approximately 73.8 million square feet of developable area.

Read here: Lodha Group's Macrotech Developers to launch IPO on April 7; check issue size, price band, other key details

Brokerages are divided on the issue as some advised subscribing the offer on attractive valuations compared to its listed peers, while others flagged risks of COVID-19 to the real estate sector and the company’s huge debt.

Also Read: Macrotech Developers IPO opens today; should you subscribe?

“We have some investment concerns for the IPO, the company is having net debt of Rs 16,700 crore as of 31st December 2020, any downturn in the industry may affect the company significantly. The company product portfolio is too concentrated on the residential market of the MMR region and any change in rule and regulation by authority may affect the company significantly,” said Yash Gupta Equity Research Associate, Angel Broking.

The company has not been able to generate significant positive cash flow for the shareholder in the last three years and may continue to have negative cash flows in the near future, he added.

Angel Broking has a Neutral rating for this IPO.

Published : April 07, 2021 02:58 PM IST

Macrotech Developers IPO subscribed 26% on day 1; QIB portion booked 58%

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