Macrotech Developers IPO: Shares trading at 4-5% premium in grey market

Shares of Macrotech Developers, formerly known as Lodha Developers, traded at only 4 to 5 per cent over issue price in grey market ahead of company's initial public offer (IPO). The price band of the IPO is Rs 483 to Rs 486 per equity share. Shares of the real estate company traded at a premium of Rs 20-25 in the grey market at Rs 506-511 as compared to the upper limit of the price band, as per data from IPO Watch.

The real estate company's public issue will open on April 7 and close on April 9. The anchor portion of the issue will be open for bidding on April 6. Shares of the IPO are likely to be allotted on April 16 and the stock is expected to make its debut on April 22.

Lot size of the IPO will be 30 shares for which one will have to spend Rs 14,580. A maximum of 13 lots comprising 390 shares can be bought for Rs 1,89,540.

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Promoters of Macrotech Developers hold 100 per cent stake in the firm and aims to sell 10 per cent stake through the issue. They will issue 51,440,328 equity shares of Rs 10 during the IPO.

Proceeds from the IPO will be used to reduce aggregate outstanding borrowings of the company on consolidated basis, acquire land or land development rights, and meet general corporate purposes.

Macrotech Developers filed draft papers with the capital market regulator Securities and Exchange Board of India (SEBI) in its third attempt to go public. The company tried to go float an IPO in 2009 and again in 2018 but backed down citing challenging times for the realty sector.

In 2009, erstwhile Lodha Group had filed draft red herring prospectus (DRHP) with SEBI to raise around Rs 2,800 crore by listing its shares on the stock exchanges. It received the regulator's approval in January 2010 but later shelved the plan due to unfavourable market conditions in the wake of the global financial crisis.

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In April 2018, the company again approached SEBI to raise about Rs 5,500 crore through IPO. It had received the regulator's approval then but didn't go ahead with the public issue.

Founded in 1995 by Mangal Prabhat Lodha, Lodha developers, now rechristened as Macrotech Developers, is one of India's largest real estate players by sales bookings, which develops real estate across the residential and commercial sectors in the Mumbai Metropolitan Region (MMR), Pune and London.

As of December 2020, the company has consolidated outstanding borrowings to the tune of Rs 18,662.19 crore. On the back of COVID-19's impact on the real estate sector, it has reported a loss of Rs 264.3 crore against revenue of Rs 2,915 crore for the nine months ended December 31, 2020. The company had posted a profit of Rs 503 crore against revenue of Rs 9,272.9 crore in the year-ago period.

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(Edited Vivek Punj)