Macrotech has disappointing start on BSE

Macrotech expects to utilise about 60% of the IPO proceeds to trim its debt.

1 min read . Updated: 19 Apr 2021, 11:03 PM IST Ravindra N. Sonavane

The stock touched a low of ₹421.15 before closing at ₹463.15 on the BSE, down 4.7% from its issue price

Mumbai: Macrotech Developers Ltd, earlier known as Lodha Developers, made a weak debut on the stock exchanges on Monday, closing at a nearly 5% discount to the issue price. Its initial public offering was subscribed 1.4 times last week supported by robust response from foreign investors.

The stock opened at ₹439 on the BSE and touched a low of ₹421.15, or fell as much as 13.34% from its issue price of ₹486. The scrip closed at ₹463.15, down 4.7% from its issue price.

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Analysts says that the weak listing was due to recent rising covid cases and discontinued decision of stamp duty waiver on property registration by the Maharashtra government. The stock is also under pressure because of some media reports suggesting a complete lockdown in Maharashtra in few days.

Foreign investors were the biggest contributors to this initial public offering (IPO). Foreign institutional investors (FIIs) had subscribed nearly 95% of its anchor book and accounted for 53% of the total bids in the IPO book holding. FIIs made 84% of the total bids from qualified institutional investors.

The institutional investor category of 10.23 million shares was subscribed 3.06 times. The non-institutional category, comprising high net-worth individuals, was subscribed 1.45 times. The IPO was valued at 26.3 times of FY20 earnings and 4.8 times of FY20 book value, which, analysts believe, appear to be reasonably priced vis-à-vis its peers such as Godrej Properties and DLF.

The company had a debt of ₹18,662.20 crore as of December. It expects to utilise about 60% of the IPO proceeds to trim this debt.

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