Macrotech Developer IPO

IPO Details:

Price Band: 483-486

Cutoff Price: 486

About Company:

One of the largest real estate developers in India, by residential Sales value for the financial years 2014 to 2020. Core business is residential real estate developments with a focus on affordable and mid-income housing. Currently, Macrotech have 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, a subsidiary of ESR Cayman Limited, an Asia Pacific focused logistics real estate platform. Macrotech also develop commercial real estate, including as part of mixed-use developments in and around their core residential projects.

Competitive Strengths:

1. One of India’s largest residential real estate developers with a leadership position in the attractive MMR market.

2. Well-established brand with ability to sell at premium pricing and throughout the construction phase.

3. Proven end-to-end execution capabilities with continuous innovation and ability to deliver projects at competitive cost.

4. Strong focus on sustainable development.

5. Highly diversified portfolio across price points and micro-markets in the MMR with a focus on affordable and mid-income housing.

6. Significant inventory of completed, ready-to-move units.

7. Unique ability to develop townships and generate recurring operating cash flows from them.

8. Innovative marketing and sales strategies

9. High-quality management team.

Strategies:

1. Focus on enhancing leadership position in residential developments by growing in the MMR and gradually diversifying in select tier-I Indian cities.

2. Leverage leadership position to act as a partner of choice for landowners and grow using a joint development or joint venture approach.

3. Pursue a value-accretive land acquisition strategy.

4. Develop large-scale industrial parks.

5. Focus on development of commercial projects as part of mixed-use developments.

Financial Performance:

Company revenue, net profit and EPS is positive, but it's in downward trend in last three years. In 2020, pandemic can be the reason for a major dip in revenues and net profit. Overall financials of the company doesn't seem to be stable.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Reduction of the aggregate outstanding borrowings of our Company on a consolidated basis.

2. Acquisition of land or land development rights.

3. General corporate purposes.

Competitors Comparison:

Because of decent earnings, P/E of the Macrotech Developers is least in the industry. P/BV is slightly higher than its competitors.

Our view: Macrotech Developers seems to be properly valued after comparing with its competitors. I am avoiding this IPO because of less grey market premium and poor subscription data.

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Grey Market Premium:

Subscription Details:

Allotment Status: Link

Listing Status:

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