Unlisted shares of Arkade Developers Ltd are trading Rs 85 higher in the grey market, signalling a 66.41 per cent listing gain from the public issue.
Arkade Developers IPO: The initial public offering of real estate company Arkade Developers Ltd, which will be closed on Thursday, September 19, has received an overwhelming subscription so far. The price band of the Rs 410-crore IPO has been fixed at Rs 121 to Rs 128 per share for the public issue. Till 10:18 am on the fourth day of bidding on Thursday, the IPO received a 32.86 times subscription garnering bids for 78,12,97,000 shares as against the 2,37,75,719 shares on offer.
The IPO was opened for public subscription on September 16.
The category for non-institutional investors received 69.07 times subscription, while the portion for retail individual investors (RIIs) got subscribed 35.76 times. The QIB category received 62 per cent.
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Arkade Developers IPO: Key Dates
The IPO was opened for public subscription on September 16 and will be closed on September 19. The share allotment of the Arkade Developers IPO will likely be finalised on September 20, while its shares will be listed on both BSE and NSE on September 24.
Arkade Developers IPO: Price Band
The price band of the Rs 410-crore much-awaited IPO has been fixed at Rs 121 to Rs 128 per share for the public issue.
Arkade Developers IPO: GMP Today
According to market observers, unlisted shares of Arkade Developers Ltd are trading Rs 85 higher in the grey market than its issue price. The Rs 85 grey market premium or GMP means the grey market is expecting a 66.41 per cent listing gain from the public issue. The GMP is based on market sentiments and keeps changing.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
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Arkade Developers IPO: Analysts’ Recommendations
Most brokerages have given a ‘subscription’ option to the IPO.
Brokerage firm Choice in its IPO note said, “ADL is a real estate development company specialising in premium lifestyle residential properties in Mumbai, the commercial capital of Maharashtra, India. The company focuses on two key areas: new developments and redevelopment projects. ADL’s operations are strategically based in the MMR, particularly in the western suburbs. Over the past two decades, ADL has successfully completed 28 projects. With a steady increase in the number of units sold, the company has shown strong growth in both revenue and profitability.”
At the higher end of the price range, ADL is asking an EV/Sales ratio of 3.2x, which is at a discount to the peer average. Historically, the company has concentrated on the western suburbs of MMR, but in recent years, ADL has expanded into the eastern suburbs of Mumbai. This business growth strategy, along with its near debt-free status and consistent on-time project delivery, positions ADL for sustainable growth in the future. “Thus, we recommend a “SUBSCRIBE” rating for this issue,” Choice said.
SBI Securities in its note also given a buy call to the IPO. It said, “The company is valued at FY24 P/E multiple of 19.3x at the upper price band of Rs 128 based on post-issue capital. The issue appears to be attractively priced given the excellent execution track record, healthy market share in the identified micro-markets, strong balance sheet and the growth potential of the real estate industry in the MMR. The funds raised through the IPO will be utilised for acquiring land parcels which will further boost the development pipeline. We recommend subscribing to the issue for both listing gains as well as long term investment horizon.”
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Arkade Developers IPO: Anchor Investment
Realty firm Arkade Developers Ltd has raised Rs 122.40 crore from anchor investors ahead of its initial public offering.
According to a regulatory filing, the company has issued 95,62,500 shares to anchor investors at Rs 128 per share, aggregating to Rs 122.40 crore. These investors include BNP Paribas Financial Markets — ODI, Societe Generale-ODI and Saint Capital Fund.
Arkade Developers IPO: More Details
The IPO is entirely a fresh issue of equity shares worth Rs 410 crore with no offer-for-sale (OFS) component.
Proceeds from the issue will be used for development of the company’s ongoing as well as upcoming projects, funding acquisition of future real estate projects and general corporate purposes.
Arkade Developers is a fast-growing real estate development company with a significant presence in Mumbai. As of July 31, 2023, it has developed 1.80 million square feet of residential property, including through partnership entities in which Arkade holds the majority stake.
Between 2017 and Q1 2023, the company launched 1,040 residential units and sold 792 residential units in different markets in the Mumbai Metropolitan Region (MMR) in Maharashtra.
Arkade Developers’ revenue in fiscals 2023, 2022 and 2021 stood at Rs 224.01 crore, Rs 237.18 crore and Rs 113.18 crore, respectively.
The company said that half of the issue size has been reserved for qualified institutional buyers, 35 per cent for retail investors and the remaining 15 per cent for non-institutional investors. Further, investors can bid for a minimum of 110 shares and in multiples thereof.
