The Rs 2,500-crore initial public offering (IPO) of Lodha Group’s Macrotech Developers has subscribed 1.36 times on April 9 (Friday), the last day of bidding.
The offer has received bids for 4.95 crore 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 40 percent, while that of qualified institutional buyers has received a subscription of 3.05 times. Non-institutional investors have put in bids 1.44 times of the reserved portion and the employees’ portion is booked 17 percent.
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.
Lodha Group's Macrotech Developers to launch IPO on April 7; check issue size, price band, other key details
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.
Brokerages are divided on the issue as some advised subscribing to 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.
“The IPO is valued at 26.3x of FY20 earnings and 4.8x of FY20 book value, which appears to be reasonably priced vis-à-vis its peers like Godrej Properties and DLF. MDL is committed to substantially deleverage its balance sheet in ensuing quarters led by IPO proceeds; recovery of investment from the UK projects and improved collection. MDL’s plan to reduce net debt to Rs 127 billion in the coming quarters negates concern over high leveraging. Further, a strong project portfolio and monetization of huge land banks offer comfort. Moreover, its return ratio looks to be superior compared to peers,” Reliance Securities said.
Reliance Securities recommends 'Subscribe' to the issue.
First Published: IST