Puranik Builders may use the proceeds from the initial public offering (IPO) to retire debt and to invest in ongoing projects
Mumbai: Puranik Builders Pvt. Ltd, a Mumbai-based residential real estate developer, has started work on its initial public offering (IPO), which could make it the first real estate company in India to go public in over seven years, two people aware of the development said.
Founded in 1968, Puranik Builders has developed over 520,000 sq. mt of land over four decades, and has over 1.29 million sq.mt under development, according to the company’s website.
“Puranik has appointed investment bank Edelweiss Financial Services and they have begun work on their IPO. The company will likely use the proceeds from the initial public offering to retire debt and to invest in ongoing projects," said one of the persons cited above, requesting anonymity as he is not authorized to speak to reporters.
The transaction is at an early stage and they are yet to decide the quantum of fund-raising they will target, he added.
“We are considering a number of possible financing options and have nothing further to comment," said Shailesh Puranik, managing director of Puranik Builders, in a text message.
Emails sent to Edelweiss went unanswered.
Puranik Builders’ ongoing and upcoming projects are based in areas such as Mulund, Thane, Dombivli, Neral, Pune, Nashik, Kalyan and Lonavala. The company has developed 49 projects so far.
Puranik Builders initial share sale, if it goes through, will be the first major transaction from the real estate sector in the IPO market since 2010.
The last time a private real estate firm came to the primary market was in 2010, when several companies such as DB Realty Ltd, Prestige Estates Projects Ltd, Oberoi Realty Ltd, Nitesh Estates Ltd and Man Infraconstruction Ltd collectively raised around Rs4,275 crore.
In 2015, Pune-based real estate developer Paranjape Schemes (Construction) Ltd had filed its draft papers for an IPO with the Securities and Exchange Board of India (Sebi). It planned to raise Rs600 crore through the sale of new shares. The IPO was, however, shelved later.
Other real estate companies that have looked at an initial share sale include affordable housing developer Value Budget Housing Corp. Pvt. Ltd (VBHC). In 2015, Mint reported that VBHC was evaluating tapping public markets to raise funds.
Puranik Builders’ plans to go public come at a time when the Indian IPO market has seen its best year ever.
In 2017, 36 companies raised Rs67,147 crore through the IPO route, while 26 companies raised Rs26,493.8 crore in 2016, data from primary market tracker Prime Database shows.