Shriram Properties stock tanks at listing
PremiumThe initial share sale of Shriram Properties, which closed on 10 December, had been subscribed 4.60 times
MUMBAI : Real estate developer Shriram Properties made a weak debut on Indian stock markets on Monday, listing at ₹90 apiece on NSE, a discount of 23.7% to its issue price of ₹118. The stock finally closed at ₹98.9 per share at the end of trading session.
This came on a day when Indian markets tanked more than 2% amid rising fears of the Omicron variant of covid-19.
The initial public offering (IPO), which closed on 10 December, was subscribed 4.60 times. The retail portion of the share sale was subscribed 12.72 times, while the portion reserved for institutional investors was subscribed 1.85 times and the high net-worth individual category was subscribed 4.82 times.
Shriram Properties is part of the Shriram Group, and is one of the leading residential real estate development companies in South India. The company primarily focuses on the mid-market and affordable housing segments. Bengaluru and Chennai are the key markets for the company, which also has operations in Visakhapatnam, Coimbatore, and Kolkata.
The geographic concentration of Shriram Properties could be a cause for concern for investors, ICICI Direct said in a note ahead of the IPO. “Shriram Properties’ real estate development activities are geographically concentrated in Bengaluru, Chennai, Visakhapatnam, and Coimbatore in south India. As of 30 September 2021, 24 ongoing projects, four projects under development and 4 forthcoming projects, representing 77.91% of estimated saleable area for ongoing projects, projects under development and forthcoming projects, are located in south India. With higher concentration of business in south India, Shriram Properties’ performance may be impacted in case of slowdown or any uncertain events in the real estate market," the brokerage said.
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As of 30 September 2021, Shriram Properties had a total portfolio of projects aggregating to 46.72 million sq. ft of estimated saleable area.
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