The company’s operations are heavily skewed towards the South-Central Mumbai market, and valuations are on-par with listed realty peers, which could be the factors for tepid debut on the bourses.
Since most of the land parcels in the South-Central Mumbai market are re-development projects, the company’s core competence lies in tenant settlement, which is a crucial element for unlocking value on such land parcels.
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“However, investors allotted shares can hold it from a medium to long-term perspective,” said Prathamesh Masdekar, Research Analyst, StoxBox.
The IPO of Suraj Estate Developers was booked over 15.65 times at close. The retail portion of the issue was subscribed 9.3 times, and the non-institutional category’s subscription rate stood at 18.9 times.
The net proceeds from the fresh issue will be used towards repayment of debt of the company and its subsidiaries, acquisition of land or land development rights, and other general corporate purposes.
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Suraj Estate has a longstanding presence of over thirty-six years in the real estate market in Mumbai. It has been developing residential and commercial properties throughout South Central Mumbai. According to a Anarock report, it is one of the top ten developers as per supply (in number of units).
Operating in both residential and commercial real estate, the firm caters to the “value luxury” and “luxury” segments, offering a diverse range of properties priced from Rs 1 crore to Rs 13 crore.
The company also plans to foray into developing boutique office spaces on Tulsi Pipe Road, Mahim, to meet the growing demand for smaller independent offices in the commercial segment.
The company clocked a profit of Rs 32 crore in FY23, a rise of 21% year-on-year. Revenue during the year FY23 rose 12% to Rs 306 crore, primarily due to increase in sales on account of new projects launched in the value luxury segment and additional floor transaction of commercial projects.
The company’s profit margin increased to 10.49% in fiscal 2023 from 9.72% in fiscal 2022.
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