The issue would be a mix of fresh issuance and offer for sale (OFS) for existing shareholders
Proptech startup Square Yards plans to launch its initial public offer (IPO) to raise about Rs 1,500 crore for future growth of the business and will soon file a draft document with market regulator Sebi to get clearance for the issue, according to sources.
The company, which is one of the leading real estate consultants, has finalised investment bankers for its proposed public issue, they added.
The Square Yards spokesperson did not offer any immediate comment.
Market sources said that Square Yards is planning to launch its IPO with an issue size of about Rs 1,500 crore. The issue would be a mix of fresh issuance and offer for sale (OFS) for existing shareholders.
Square Yards has finalised investment bankers for its IPO and plans to file a draft red herring prospectus (DRHP) soon, they added.
The Gurugram-based company has so far raised USD 125 million, of which USD 60 million as equity and USD 65 million as debt capital.
Some of its major investors include Kae Capital, ADM, Bennett Coleman and Co. Ltd, Reliance Capital along with Koh Boon Hwee (Ex-Chairman, SingTel & DBS) and George Hongchoy (CEO, Link REIT).
Square Yards is mainly into property brokerage, home loan brokerage and rental businesses. It offers a full-stack digital real-estate journey from search and discovery, transactions, home loans, home interiors, rentals, property management, and post-sales services.
The company reported a revenue of Rs 250 crore in the 2020-21 financial year. It sold properties worth Rs 6100 crore on behalf of builders and facilitated home loans worth Rs 1,900 crore during the last fiscal.
Square Yards also provides B2B (business to-business) SaaS (software as a service) to real estate agents, property developers, banks, and other financial institutions.
The company has acquired three companies in recent past Azuro for rentals and property management services, PropsAMC for real estate data intelligence and PropVR for 3D VR based immersive digital property experiences.
According to market experts, the pace of adoption of technology in real estate sector has accelerated following the outbreak of the COVID pandemic in March 2020.
Seeing the growth potential, investors are putting money in the proptech space.
Technology based startup companies started to enter the Indian real estate market in 2008.
Proptech sector, which has garnered investments of nearly USD 2.5 billion dollars till 2020, has evolved from mere digital classifieds to offering full-stack services.
Use of technologies such as virtual reality, drones, big data, artificial intelligence are now being actively used in home purchases as well as leasing of commercial spaces.
Despite the pandemic, Bengaluru-based real estate platform NoBroker.com last month raised USD 210 million (Rs 1,575 crore) from investors at USD 1 billion valuation to become the first unicorn in the proptech sector.
Australia’s REA Group had last year acquired a majority stake (61 per cent) in Elara Technologies Pte Ltd, which owned Housing.com, Makaan.com and PropTiger.com.
US-based News Corp holds the remaining share. News Corp is also the majority shareholder in the Australian REA Group. Elara Technologies has now been re-branded as REA India.
Proprety consultant Anarock has also announced plans to raise USD 100 million (around RS 750 crore) as equity to expand business and acquire proptech firms.
During the pandemic, the Indian real estate sector has witnessed two successful public issues of the Real Estate Investment Trust (REIT).
Mindspace Business Parks REIT, owned by K Raheja, was listed in August last year after raising Rs 4,500 crore, while global investment firm Brookfield’s REIT public issue worth Rs 3,800 crore got listed in February this year.
Realty major Macrotech Developers, erstwhile Lodha Developers, raised Rs 2,500 crore through IPO in April and also Rs 4,000 crore through Qualified Institutional Placement (QIP) last month.
Shriram Properties launched its IPO this month to raise Rs 600 crore and the issue has been fully subscribed.
