Macrotech (Lodha) Developers IPO: Details

6 Apr 2021  Read 971 Views

Being in trend is important. In those lines, one new-found trend of the Dalal street is the IPO frenzy. At least one new company is hitting the markets every week. And it's time for the real estate sector.

The Macro tech Developers' IPO is next on the cards to make its IPO debut on April 7, 2021. And before you make an investment decision, it is important to know all the details pertaining to the issue. But don't worry, we'll fill you with all that you need to know about the same.

Details of Macrotech Developers IPO

Macro tech IPO will be open for subscription until April 7, 2021. All the formalities, including allotment and refunds, are expected to be wrapped up by April 22, on which the listing of the shares will happen. The 2500 Crores worth issue will be going live on both the markets, NSE and BSE. The face value of the share is fixed at Rs 10 per equity share. The IPO price is estimated to be Rs 483 to Rs 486 per equity share. 

Key details of the Macrotech developers IPO

IPO subscription starts

April 7, 2021

IPO subscription last date

April 9, 2021

IPO Price 

Rs 483 to 486

Listing to happen at 

NSE and BSE

Type of issue 

Book building issue 

Total issue price 

2,500 crore 

Face value 

Rs 10

The book-building issue is aimed,  

  • At bringing down the borrowings of the company. Approximately 1500 crores will be used in these lines. 
  • To acquire new lands and other land-based development rights. About 375 crores will be utilised for fulfilling it. 
  • And the rest will be used to meet other working and general corporate requirements. 

A retail individual can opt for a minimum of 1 lot containing 30 shares by paying a sum of Rs 14,580. And thereafter, he could subscribe in multiples of 30 to a maximum of 13 such lots. The maximum amount has been fixed at 189,540 for 390 equity shares. 

Price Details Of Macrotech Developers IPO

Particulars 

Lots 

Total No of Shares

Amount (cut-off) 

Minimum

1

30

14,580

Maximum

13

390

189,540

Further, 50 per cent of the IPO is set aside for QIB (Qualified Institutional Buyers), 15 per cent for non-institutional buyers, and the rest 35 per cent will be allotted for the retail subscribers. Around 10 entities will be acting as Lead managers, including Axis capital Limited and ICICI securities limited. 

About the company

Macrotech developers happen to be one of the leading companies in the real estate segment. Put into existence in 1995, the company aims at offering affordable housing to many, especially those belonging to the mid-income groups. It was earlier known as Lodha developers. As a result, the company routes about 58% of its income from this segment. 

In 2019, the company entered into the development of logistics, commercial parks and industrial parks. They did this successfully by entering into a joint venture with ESR Mumbai 3Pte limited, a subsidiary of ESR Cayman. Apart from that, the company has some notable projects as well. They include, 

  • Palava – Navi Mumbai, Dombivali region 
  • Lodha Sterling – Thane
  • Casa Maxima - Mira Road and so on

It has successfully completed about 91 projects (as of Dec 2020).

Abhishek Mangal Prabhat Lodha is the MD (Managing Director) and CEO of the company. The promoters of the company include Abhishek Mangal Prabhat Lodha, Rajendra Narpatmal Lodha, Sambhavnath Infrabuild and Sambhavnath Trust. 

Some of its peers include DLF, Brigade Enterprise, Godrej property and Oberoi realty.

Financials Of The Company

The below table contains the financial highlights of the past 3 years 

Particulars

31 - Mar - 20

31- Mar -19

31 - Mar - 18

Total Assets 

4,06,925.56

4,98,639.40

4,78,112.76

Total Revenue 

1,25,609.85

1,19,788.67

1,37,265.69

Profit after Tax

7,448.36

16,439.77

17,893.90

The financials of the company show a decline in the PAT in the last three year period. The profit after tax is also down by approximately 54% in the immediate previous year. The earnings per share stood at 30.52 (average) for the three years. Covid-19 did leave a bad mark on the company dragging its profits to a negative 2,643.02 million in the nine months ended Dec 2020. 

Should you subscribe?

It's crucial that you look into the advantages and disadvantages before choosing aside. So read further to find some crucial pointers regarding the issue.

Being one of the largest residential estate developers, the company has achieved a good position in the market. The company has ensured that it holds a diversified customer base. Furthermore, with a high brand value, the company has a good trend record for completed and ready-to-move-in houses. Good quality management with immense experience and innovation in its tasks acts as added advantages. It has strong future plans as well. It is eyeing the development of 800 acres in the Palava area, which is close to the Jawaharlal Nehru Port. 

However, with the pandemic still set to open its second wave of attack and with many places showing increased cases, we don't know the extent to which it might affect the business. With people running short of money and work-from-home becoming the new normal, the business is still amidst huge risks. This is very much visible via the revenue figures of the last nine months of 2020, which is highly fluctuating. The company also has a huge debt which might be of concern to an investor. To add on, its investment in the UK might also affect its operations.

Final thoughts

It's time you weigh the various pros and cons and make a decision accordingly. Though the company seems to be a good bid, there is also a high amount of risk associated with the issue.

And the ball is in your court. So what's your call going to be? Bid or pass?

Let us know in the comments below.

About the Author: Varishika Dinesh | 100 Post(s)

Varishika is on the verge of successfully completing B.Com. Nothing excites her more than reading books and watching movies. Business, finance, economy? You have her attention.

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