One of the leading real estate firms, Shriram Properties Limited, has decided to float an IPO during the fourth quarter of the current fiscal as it expects realty companies to get better incentives during the Union Budget. It has also decided to reduce the amount it plans to raise to around ₹750 crore.
“As there have been good responses to companies hitting the capital market and which raised money this month, we even thought of a Diwali launch. But now we have deferred it to the fourth quarter to some time around the Union Budget in February,” Murali Malayappan, CMD, Shriram Properties, told BusinessLine.
“Another reason for the IPO is that we see good positive news flow with incentives in the offering for the real estate sector in the next year’s Budget, which is expected to give us an advantage,” he added.
The company is not planning to offer a pre-IPO and is expected to go straight to the investing public. The real estate developer has presence in both tier-I and -II cities across southern States. So far, the company has commitment Starwood Capital Group, TPG, Walton Street Capital and Tata Capital.
SEBI’s nod
For the public offering, Shriram Properties received clearance to raise money by the regulator Securities and Exchange Board of India a couple of years ago. Initially, the company was to raise ₹1,250 crore but due to slowing down of economy and Covid-19 pandemic, it has scaled down to raising ₹750 crore.
Murali Malayappan, without revealing the amount, said: “The company is planning to use a portion of the IPO proceeds to clear the debt and the balance on projects and also to create land banks in key strategic towns in South India.”
“Shriram Properties has been doing well in the recently-launched plotted developments. This has boosted our revenues,” he said.
The company early this year expanded its plotted land development portfolio through a strategic partnership with SLV Infra Projects, which is engaged in plotted land development in Bengaluru.