Retail investors portion was subscribed 25% and that of employees 10%. Qualified institutional buyers portion was subscribed the highest with 66% and non-institutional investors 19%
Mumbai : The initial public offer of Macrotech Developers was subscribed just 35% as of the second day of bidding on Thursday. The ₹2,500 crore public offering closes on Friday. Ace investor, Rakesh Jhunjhunwala invested ₹50 crore on day one of the bidding, according to a person aware of the bid details.
The issue received 12.66 million equity shares against the IPO size of 36.42 million equity shares. Retail investors portion was subscribed 25% and that of employees 10%. Qualified institutional buyers portion was subscribed the highest with 66% and non-institutional investors 19%.
The company will use the entire proceeds for repaying debt and acquiring land or land development rights.
Analysts at Angel Broking in an IPO note said "Macrotech Developers has a strong brand in affordable and mid income housing projects, but is not able to deliver the growth in sales and free cash flow in the last couple of years. The company reported a fall of 68% in sales for nine months ended 31 December 2020 and reported a loss of ₹265 crores. Given weak revenue growth in the past and leverage balance sheet we assign a "NEUTRAL" rating to the IPO".
Macrotech Developers has real estate projects under several brands, the Lodha and Lodha Luxury brands for their premium and luxury housing projects, and the iThink, Lodha Excelus and Lodha Supremus brands for their office spaces.
"...the company has a high net debt as of Q3 FY21, which stood at ₹16,913 crore translating to a net debt-to-equity ratio of almost 4x. Further, it has contingent liabilities of ₹1,600 crore pertaining to its UK operations. The company has given loans and guarantees totalling almost ₹6,000 crore as of December 2020 to related parties," brokerage Sharekhan said.
Earlier on Tuesday, the company had raised ₹740 crore from marquee institutional investors such as Brookfield, Abu Dhabi Investment Authority and CDPQ’s real estate investment arm.