Macrotech Developers IPO Review & Recommendations @ Chanakyanipothi.com , India`s Oldest & most Trusted Investment Blog.Operational since 8th December 1999, this is the Only Investment Platform in India, which has successfully completed 21 Years
Macrotech Developers IPO Live Review : youtube.com/c/chanakyanipothi
Let me first give salient information about the company.
Microtech Developers ( Lodha) is the largest real estate developer in India, by residential Sales value for the financial years 2014 to 2020. Its core business is residential real estate developments with a focus on affordable and mid-income housing.
Currently, it has residential projects in the MMR and Pune. In 2019, it forayed into the development of logistics and industrial parks and entered into a joint venture with ESR Mumbai 3 Pte. Limited (“ESR”), a subsidiary of ESR Cayman Limited, an Asia Pacific focused logistics real estate platform. It also develops commercial real estate, including as part of mixed-use developments in and around its core residential projects
The Lodha group has been involved in the real estate business since 1986. The Company is led by Abhishek M. Lodha, its MD and CEO.As of December 31, 2020, it has 91 completed projects comprising approximately 77.22 million square feet of Developable Area, of which 59.13 million square feet is in affordable and mid-income housing, 12.15 million square feet is in premium and luxury housing, 5.21 million square feet is in office space and 0.74 million square feet is in retail space. It has 36 ongoing projects comprising approximately 28.78 million square feet of Developable Area
For more study :www.lodhagroup.com
The Promoters of Macrotech Developers are Abhishek Mangal Prabhat Lodha,Rajendra Narpatmal Lodha, Sanbhavnath Infrabuild & Sambhavnath Trust and the promoters have very rich experience of Real Estate Business of Mumbai.
The Offer comprises of a Fresh Issue
IPO Opens on : 7 April 2021
IPO Closes on : 9 April 2021
This is Book Built Issue IPO of net 50823045 Shares & net Issue Size is Rs. 2470 Cr
The shares of Face Value Rs. 10 are being offered in the price band of Rs. 483-486
minimum Lot Size for retail investors is 30 Shares
The scrip will be Listed at BSE,NSE,on 22 April 2021
Shares offered to
QIB(50%) 25411522 Shares = INR 1235 Crs
NII (15%) 7623457 Shares = INR 370.50 Crs
RII (35%) 17788066 Shares = INR 864.50 Crs
Now most important part of this discussion, evaluation of the IPO.
Earnings per Share 2017-18 Rs 45.10
Earnings per Share 2018-19 Rs 41.33
Earnings per Share 2019-20 Rs 18.46
Earnings per Share 2020-21,9M Rs 6.83
Book Value of the Share as on 31.12.2020 Rs 97.03
Upper Price Band/ EPS of 1920 : 26.33
Upper offer price/Book Value Ratio: 5.01
Lets do Peer Comparison
Brigade Enterprises @ PE Multiple 43.62
DLF Limited @ PE Multiple N/A
Godrej Properties @ PE Multiple 131.10
Oberoi Realty @ PE Multiple 30.80
Prestige Estates Projects @ PE Multiple 25.80
Sobha @ PE Multiple 15.56
Sunteck Realty @ PE Multiple 48.10
So what to do ???
This IPO reminds of Chalet Hotels IPO,…. similar trends and strong gains some months after listing .
Aspect 1: the IPO size is relatively high. If the market mood was bullish, there was no problem with Rs. 2500 cr IPO. Considering depressed investor sentiment as of now, the IPO size is relatively large.
The Promoters and the company have very rish experience of this business and considering ongoing projects and developable land bank, the future of the company is also very bright.
Most important aspect: the shares are offered at very reasonable valuation.
The most negative factors are : fear of lockdown, and lack fancy in the grey market.
We believe that the promoters and the lead managers must have considered these negative factors while deciding to enter the capital market. The subscription and response from Anchor Investors are also encouraging.
So considering all these aspects, and inspite of no fancy in the grey market and fear of lockdown, one may apply in this IPO with long term investment angle, with the clear understanding that in the shortterm, listing gains may not be visible.Understand one more aspect….. at the time of listing eg on 22 April,2021, We believe the market will be in bullish state,and there are all chances of Positive listing….!!!!!