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It plans to raise Rs 2,500 crore via its public issue. The key business of the company is dedicated to the Mumbai Metropolitan Region (MMR) and also across Pune
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Macrotech Developers Limited (formerly known as Lodha Developers) – one of India’s leading real estate brand will open its IPO (Initial Public Offering) on Wednesday, April 7, and will close the issue on Friday, April 9. The company has fixed the price band at Rs 483-486 per equity share with a minimum bid of 30 shares and in multiples thereafter.
The real estate major looks forward to raising Rs 2500 crore via its public issue of 51,440,328 equity shares at a face value of Rs 10 each. It has proposed to use the net proceeds to reduce aggregate outstanding borrowings of the company on a consolidated basis, acquisition of land, and to meet general corporate purposes.
Previously, the company has made a couple of attempts to launch its IPO in 2009 and 2018. However, the plan was later not carried due to unfavorable market conditions.
The company’s strength lies in its core business of residential real estate across consumer segments with a focus on affordable and mid-income housing. In FY 2020, 57.77% of residential sales value from affordable and mid-income housing which further demonstrates the company’s focus in this segment.
The key business of the company is dedicated to the Mumbai Metropolitan Region (MMR) and also across Pune. As of December 31, 2020, around 3803 acres of land is reserved for future development in the MMR.
"The company will solely focus to expand its business in the country itself with a major focus on affordable - mid-income housing in MMR", Lodha said while addressing the press.
On the financial front, the company has posted an overall loss of Rs 2643.02 million in the nine months ended December 31, 2020. However, the company's PAT (Profit after Tax) in the last three financial years has been positive at Rs 7,448.36 million (FY'20), Rs 16,439.77 million (FY'19), and 17,893.90 million (FY'18).
As of December 2020, the debt of the company stood at Rs 16,700 crore and will further decrease to 12,700 crore in the Post-IPO period, said Abhishek Lodha – MD and CEO of the company. Around 1500 crore is to be utilized for debt reduction from the net proceeds of the IPO, the DRHP stated.
Responding to BW Businessworld's query on the debt reduction plan, Lodha said, the company expects inflows from unsold land and also bills receivable from sold properties. Further, the strong demand in the affordable housing sector will clock better numbers and will post better results, and support the debt reduction plan.
Moving further, risks for the company in the future are rising Covid-19 cases in the country and especially in the state of Maharashtra, contingent liabilities, and litigations, as mentioned in the DRHP.
Founded in 1995 by Mangal Prabhat Lodha, the 26-year-old firm is the largest property company to get listed after DLF. Listed peers of the real estate developer are Brigade Developers, DLF, Godrej Properties, Oberoi Realty, Prestige Estates Projects, Sobha, and Sunteck Realty.