One of the leading players in real estate, Shriram Properties Limited closed its Initial Public Offering (IPO) with a 4.6-fold subscription on December 10. Shares of Shriram Properties Limited are expected to go public on Monday, December 20, according to the remittance. Zerodha broker.
The Chennai-based residential real estate development company aims to raise Rs 600 crore through the public offering.
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Upstream of the listing, a market expert is of the opinion that the public offer of this real estate actor could see a low listing due to the Covid affecting this sector.
“Although the company has a strong brand in South India, but during COVID when real estate was booming, the company suffered losses,” said Aayush Agrawal, senior analyst, Swastika Investmart Ltd.
“Sriram Properties has an MCAP / sales ratio of 4.6x, while its peers Sobha, Puravankara and Prestige offer 3.8x, 3.3x and 2.4x respectively. The gray market premium is currently trading between 8-10%. Given the current market trends, we might see a relatively small list, ”said Aayush Agrawal.
Previously, the company had set a price range of Rs 113 to Rs 118 for this IPO. The total issue size of Rs 600 crore includes Rs 250 crore of new issue and a sell offer of 350. The company has fixed the market lot of 125 shares. The minimum order quantity is one lot and the maximum subscription amount for retail investors is Rs 2 lakh, while for eligible employees it is Rs 5 lakh.
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Previously, Yash Gupta, Equity Research Analyst, Angel One Ltd, pointed out that the company reported negative after-tax profit of Rs 60 crore in the first half of 2022 and also reported negative after-tax profit of Rs 68.1 crore in 2021. “The company reported a decrease in revenue over the past 2 years. In 2021, the company reported revenue of 501 crore down 20.7% from 631.8 crore of Rs in 2020, “he said.
Shriram Properties is primarily focused on the mid-range and affordable housing segment, with a few luxury housing projects as well. Along with the residential housing companies also having a presence in commercial offices. Bengaluru and Chennai are two key markets for the company with operations in Coimbatore, Visakhapatnam and Kolkata.