Mumbai: Shares of Godrej Properties surged nearly 20% after listing at a 5.05% premium on its debut on Tuesday, in a first listing by any property firm in over two years.

The strong start would serve to cheer realty firms that had till recently been hard-pressed to raise funds for projects. At least 16 Indian developers have filed papers for public offers since September, looking to raise a total of about $6 billion.

Godrej Properties, a unit of Godrej Industries, had raised about $100 million through its initial public offering of 9.4 million shares, which was subscribed four times. The firm had fixed its issue price at the lower end of a Rs490-530 range.

The share touched a high of Rs586.70 during the day, after having opened at Rs514.75.

“They got an advantage of Godrej brand name and also Mumbai market, which is one of the better-placed markets in the country in the property sector," said Jigar Shah, senior vice president, Kim Eng Securities, adding it was supported by markets trading at 20-month highs.

The firm’s debut followed a series of weak starts, mainly by power firms such as Adani Power and NHPC. On Monday another power firm, JSW Energy closed at a small premium on its market debut.

However, Shah said, the stock is “expensive" at these levels, with 58 times its price-earning ratio for FY10 and four times its book value.

Property developers have once again queued up to raise funds through public offers as key markets such as Mumbai and Delhi have seen a return of demand for homes in the last few months, and a massive stock market rally since March has boosted share-sale plans of cash-strapped Indian real estate firms.

Godrej Properties plans to use the proceeds from the initial public offer for new projects, debt repayment and for joint development of projects.

About Rs203 crore will be used for land acquisition, 750 million rupees for construction and Rs172 crore to cut debt.

The firm hopes to benefit from a demand-push in the cost-effective housing segment in the country.

“We feel that affordable housing will take off strongly as a business in India and we are very committed to a strong play in affordable housing in Godrej Properties," Adi Godrej, chairman, Godrej group, said.

At 11:20 pm, shares were trading up 9.67% at Rs537.40 in a firm Mumbai market.