Macrotech IPO aka Lodha Developers ltd. is getting launched for subscription today 7, April 2021, and will be available for subscription till Friday, April 9, 2021 Shares of the Macrotech IPO are likely to be allotted on April 16 and the stock is expected to make its debut on April 22.
The company is looking to raise Rs.2500 crore through fresh issuance of shares. Ahead of the IPO, the Macrotech has already raised Rs. 741 crore from 21 anchor investors at Rs.486 per equity share which is also the higher end of the price band.
Macrotech Developers Limited (MDL) has allocated more than 1.52 crore equity shares to anchor investors,
Among Anchor Investors from foreign portfolio participated were American Funds Insurance, Ivanhoe OP India Inc, Bayvk A2 Fonds, Wellington Trust Company Brown Advisory, Government of Singapore, Oxbow Master Fund, Segantii India Mauritius, Citigroup Global, Abu Dhabi Investment Authority, Platinum Asia Investments, Colonial First State Investments, Societe Generale and Morgan Stanley Asia.
Domestic investor HDFC Trustee received 2.1 lakh equity shares in the anchor book.
The equity shares of Macrotech IPO are proposed to be listed on both BSE and NSE.
The Macrotech IPO issue will be sold in the price band of Rs. 483-486 per share and the minimum lot quantity is 30 shares and in multiples thereof translating to a minimum investment of Rs 14,580.
The latest Grey market premium price (GMP) for Macrotech IPO’s were seen up by more than 9-10% and were trading around Rs.530-540 as of today, This means people are expecting it to open on listing day to be at least at Rs.530 or more.
Having said that, I would like to add here that many people underestimated Stovekraft IPO before it’s launch, however the share price made a high of Rs.545 above the pre-open IPO price band of Rs.384.
Another Favorite Easy Trip Planner failed to list at bumper premium as recommended by great TV anchors and YouTube stars.
Likewise for HFFC (Home first finance) IPO, the GMP before launch was at about Rs.650 however the stock got listed at Rs.540 (This was Recommended by Famous Business news Anchor? ) on the other hand for IRFC IPO many people recommended a BUY and GMP were also seen at quite high range but unfortunately it open at a discount price and is currently trading at Rs.25.40.
There are many such examples of IPO’s doing just opposite of Grey market premium price. GMP does not mean in anyway a recommendation for an IPO, the financials of a company and its future prospectus tells a lot.
Let me show you the returns for the IPO’s launched in 2021 and you may get surprised that most of them have given negative return, checkout the image below:
Here is the thing no one can tell you whether the IPO will going to make a stellar debut or not, it is you who have to decide based on available information about the company.
Moreover the IPO’s now a days are very hot market every one wants to earn some quick money on listing day itself and there is nothing wrong about it.
Having said that, one must not forget to check the financials and do not fall for any recommendation from anyone, it is you hard earned money, you should decide whether to opt for the IPO or not.
You may watch various YouTube channels or read on different websites about recommendation for stocks and IPO, it is my humble suggestion and request please do not ever fall prey to it. Better than this is to invest in ETF’s?.
Therefore, whenever you are buying IPO make sure the money invested is not the one which you my need it urgently, always use extra money which you may not require in near future, Otherwise stay away completely.
Now, coming back to the Macrotech IPO let us talk about in brief about the company and its financials and other details step by step.
About Macrotech Developers Limited (MDL):
Founded in 1995 by Mangal Prabhat Lodha, Lodha developers, now known 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.
Just to let you know this is the third attempt by Macrotech (formerly Lodha Developers Ltd.) to launch its IPO after the first attempt in 2009 failed due the global financial crisis and second attempt in 2018 failed post the IL&FS crisis and adverse market conditions and now is the third attempt it scaled down its IPO size from Rs 5,500 crore in 2018 to 2500 crore in 2021.
They have global presence in India, Dubai, United Kingdom, Singapore and the United States.
Its core business is residential real estate developments with a focus on affordable and mid-income housing and currently has residential projects in the Mumbai Metropolitan Region (MMR) and Pune. MDL, in 2019, forayed into the development of logistics and industrial parks and entered into a JV with ESR Mumbai 3 Pte.
MDL also develops commercial real estate, including as part of mixed-use developments in and around its core residential projects. MDL has strong focus on de-risking projects and improving return on investments with fast turnaround time from acquisition to launch to completion.
As of December 31, 2020, MDL has 91 completed projects comprising approximately 77.22 mn sq. ft. of Developable Area, has 36 ongoing projects comprising approximately 28.78 mn sq. ft. of Developable Area and has 18 planned projects comprising approximately 45.08 mn sq. ft. of Developable Area across different segments like affordable and mid-income housing, premium and luxury housing, office space and retail space.
Apart from the above, MDL as of December 31, 2020, has land reserves of approximately 3,803 acres for future development in the MMR, with the potential to develop approximately 322 mn sq. ft. of Developable Area.
Let us now move on to know the financials of Lodha group.
Financials Of Macrotech Developers Ltd. (MDL):
As of December 2020, the company has consolidated outstanding borrowings of about Rs 18,662.19 crore. Since the 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.
For FY18 to FY20, the MDL Revenue CAGR has been -5.34%, net profit CAGR has been -36.5%.
The company had posted a profit of Rs 503 crore against revenue of Rs 9,272.9 crore in the year-ago period. However they had a negative price-to-earnings ratio in the fiscal 2021, another major concern is companies debt.
This happens because the nature of the industry in which the company operates, which does require higher financing and does cause indebtedness. The company availed moratorium offered by banks and lending institutions during the Covid-19 pandemic. The company hasn’t declared any dividend in the last four financial years.
You can check the complete financials of the company here.
Macrotech Developers Limited (MDL) Peers Comparison:
Macrotech competes in the Mumbai region with peer such as Godrej Properties Ltd., Oberoi Realty Ltd. and Sunteck Realty Ltd. Its other national peers include DLF Ltd., Brigade Enterprises Ltd., and Prestige Estate Projects Ltd.
The issue is priced at 26.3x P/E and 5.0x P/B (FY20 EPS). As of December 31, 2020, the debt to equity ratio was 3.87x which was extremely high. Which means if any unforeseen event happens in the future then their won’t be any room for company due to higher debt.
Even on the basis of P/BV (Price to book) and D/E (Debt to Equity) metrics, the company is priced at expensive valuations as compared to its peers operating in the same regions.
Having said that, specially talking about India the demand or surge in the real state industry is guaranteed for sure in the forthcoming years, moreover the money collected from the proceeds by the company will be used precisely to balance the balance sheet.
As we have already seen above that Macrotech has already raised about Rs.741 crores from anchor investors on the first day itself which does shows the confidence in the company by the foreign as well as domestic investors.
Macrotech IPO Details:
Object of the offer:
The offer comprises entirely of Fresh Issue of 5.14 cr shares aggregating to ₹2,500 cr (at upper end of the price band). Proceeds from the fresh issue are proposed to be utilized towards
- ₹1,500 cr for reduction of the aggregate outstanding borrowings of MDL on a consolidated basis,
- ₹375 cr for acquisition of land or land development rights and
- balance for general corporate purposes.
Macrotech Developers Ltd Shareholding Pattern:
Promoter and Promoter Group
Frequently Asked Question (FAQ):
1.What Is The Symbol For Macrotech IPO?
Ans: The Symbol for Macrotech Developers Limited is LODHA
2.When Macrotech IPO Coming?
Ans: The Issue Period for Macrotech IPO is 7-April-2021 to 9-April-2021.
3. Post Modification Period For Macrotech IPO?
Ans: The Post issue Modification Period for IPO is 12-April-2021 (10.00 A.M. to 11.00 A.M.).
4. What Is The Cut-off Time Period For UPI Mandate For Macrotech IPO?
Ans: The Cut-off time for UPI Mandate Confirmation is 12-April-2021 (upto 12:00 PM).
5. What Is The Issue Type For Macrotech IPO?
Ans: The Issue Type is 100% Book Building.
6.What Is The Price Band For Macrotech IPO?
Ans: The Price (Band) Range for Macrotech IPO is Rs.483 to Rs.486 per equity share.
7. What Is The Lot Size For Macrotech IPO?
Ans: The Bid Lot i.e. Minimum Order Quantity (lot size) for Macrotech IPO is of 30 Equity Shares and in multiples thereof 30 Equity Shares.
8. Who Are The Book Running Lead Managers For Macrotech IPO?
Ans: The Book Running Lead Managers are, Edelweiss Financial Services Limited, ICICI Securities Limited, IIFL Securities Limited, SBI Capital Markets Limited, JM Financial Limited, YES Securities (India) Limited, BOB Capital Markets Limited
9. What Is The Face Value For Macrotech IPO?
Ans: The Face Value is of Rs.10 whereas The Tick Size is of Rs.1
10. What Is The IPO Market Timings For Macrotech IPO?
Ans: The IPO Market Timings is 10.00 a.m. to 5.00 p.m.
Apart from above points:
The Maximum Subscription Amount for Retail Investor is Rs. 2,00,000
The Maximum Subscription Amount for Employee is Rs. 5,00,000
The Maximum Bid Quantity for QIB Investors is 35,797,080 equity shares in multiple of 30 Equity Shares
The Maximum Bid Quantity for NIB Investors is 25,569,330 Equity Shares in multiple of 30 Equity Shares
The Name of the Registrar is Link Intime India Private Limited
The Contact person name number and Email id is Shanti Gopalkrishnan, +91 22 4918 6200, Macrotech.firstname.lastname@example.org
The Address of the Registrar is C101, 247 Park, L.B.S. Marg, Vikhroli (West), Mumbai – 400 083, Maharashtra
Where To Check Macrotech IPO Application And Allotment Status?
As an investor or trader generally we are curious and anxious to know the results of the application as soon as possible. To ease the anxiety, both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) have come up with dedicated pages and links which investors can use.
The NSE has an IPO bid verification module. It can be used to verify the IPO application details uploaded on the exchange bidding system by your member/bank. The data of the bid details uploaded by the member/bank would be available on T+1 day (where T would be date receipt of bid on NSE platform).
In addition, the data would be available until six days after the issue closure date. This gives the investor enough time to verify the data and instruct the member/bank to make any changes, if required.
Exchange will also provide allotment information as provided by the registrar to the issue.
An investor can avail this facility by registering using his/her PAN details. After registration, the investor will receive an email notification from NSE on the registered email address. That email will provide the login details.
The following link can be used for the same:
The BSE has also come up with a similar platform.
This unique facility allows investors to verify the status of their application submitted to a Trading Member or a SCSB (Self-Certified Schedule Banks).
The investor can check his application status/information on the website until one week after issue close.
The following link can be used by investors:
Important Things To Keep In Mind Before Applying For IPO’s:
- Try to fill for the same IPO online from different DP ID i.e. if in your family have more than 1 account you can possibly get the allocation done in case of over subscription.
- You should have a good knowledge of the sector and the company you are planning to invest.
- Analysis of the company’s balance sheet is very crucial. A clear understanding of the company’s future projects and vision is very necessary to know whether it will have a sustainable future.
- Investment decision has to be taken carefully and not in a hurry.
- Read as much as you can about the company, its objectives for launching the IPO, its past history in business and its futures prospectus.
- Don’t go for hype in the news, your analysis should be based on facts rather than gossips and rumors.
- Many IPOs are oversubscribed. What this means is that the demand for shares is much higher than the shares available for sale. In such a situation, it is no surprise that many investors fail to get any shares allotted to them. This is why it is advisable to apply for IPO shares on the last day of bidding. This way, one can have a good estimate on how large the subscription will be. Also, in that case, one should bid for just one lot and not unnecessarily lock up their capital.
The real estate market in India has grown at a CAGR of approximately 10% from USD 50 billion in 2008 to USD 120 billion in 2017, and is expected to further grow at a CAGR of 17.7% to reach USD 1 trillion by 2030. The real estate market contributed approximately 6% to India’s GDP in 2017 and is likely to contribute approximately 13% to India’s GDP by 2025.
Let us look at some of the strength and weakness of Lodha Group.
Some of the qualitative factors and strengths of Lodha Group:
- MDL’s sales from India Operations for FY20 and 9MFY21 were ₹6,570 cr and ₹3,351 cr, respectively. Its Gross Collections from India Operations for FY20 and 9MFY21 were ₹8,190 cr and ₹2,893 cr, respectively.
- The MMR is considered the most attractive real estate market in the Top Seven Indian Markets, having the largest share of supply and absorption, as well as the highest average base selling price, of residential units from 2016 to 2020, catering to a wide spectrum of income and demography (Source: Anarock Report).
- MDL has a diversified portfolio of residential developments, spread across price points and micro-markets in the MMR. Its developments cater to wide spectrum of economic and demographic segments, from luxury residences in South Mumbai to large, integrated townships in the extended suburbs offering affordable homes.
- Over the years, MDL has established a strong reputation and track record in affordable and mid-income as well as premium housing projects. In affordable and mid-income housing, MDL has introduced one or more high-quality amenities, such as a large swimming pool, a private movie theatre, a cricket ground, a football stadium and an indoor swimming pool. MDL has developed prominent projects in the premium and luxury housing category in their respective locations as well.
- MDL has the ability to identify land, acquire it at competitive cost, aggregate it from several landowners and design a master plan to develop township projects. Upon development of the townships, Government agencies develop the surrounding infrastructure such as enhancing road and railway connectivity to improve the standard of living for the residents of the townships.
- MDL is currently developing large townships located at Palava (Navi Mumbai, Dombivali Region) and Upper Thane under affordable and mid-income housing projects. The company believes that its ability to develop such townships, coupled with the strength of its brand and innovative sales and marketing strategies will help them drive sales volumes and generate recurring operating cash flows.
- As of December 31, 2020, they also have land reserves of 3,303 acres at Palava and 500 acres at Upper Thane, and total Saleable Area of 37.6 mn sq. ft and 5.6 mn sq. ft with respect to its completed and on-going projects at Palava and Upper Thane, respectively.
Some of the Risk Factor for Lodha Group
- The company has financing agreements that require it to maintain certain financial ratios. Of the total outstanding borrowings worth Rs 18,662 crore as of December, majority of loan agreements include a mandatory prepayment using a certain percentage of its receivables under certain circumstances.
- As of December, Macrotech had unsold residential inventory of about 14.8 million squarefeet, and 5.5 million square feet of ready-to-move unsold inventory in India. The Mumbai Metropolitan Region may be exposed to natural disasters, putting its projects in region at risk.
- MDL has substantial amount of debt (₹18,662 cr of aggregate outstanding borrowings on a consolidated basis as of December 31, 2020), which could affect its ability to obtain future financing or pursue growth strategy. The company also has contingent liabilities aggregating to ₹782 cr as of December 31, 2020.
- COVID-19 has caused construction delays due to varying factors, caused a material decline in general business activity, impacted lease commitments for commercial developments, etc. The extent to which COVID-19 may affect MDL’s business and operations in the future is uncertain and cannot be predicted.
- There are material outstanding legal proceedings involving the Company, Subsidiaries, Associates, Directors, Promoters and Group Companies. These proceedings are pending at different levels of adjudication before various courts, tribunals, enquiry officers and appellate tribunals.
Therefore, it is always advisable to go through Macrotech IPO – RHP to know in detail about the company.
The only thing which should be bothering you is the research you did before applying for the IPO. Investing in IPO is risky as well as profitable. Having said that you also need to keep in mind important things mentioned above before applying to IPO’s as the risk is always involved.
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Note: Please do your own research and make investment. Moneycontain will not be responsible for any of your losses at all. The point made is for educational purpose only and intended to give information. All investments are subject to risks, which should be considered prior to making any investments. The above details are compiled from information available on public platforms. These are not buy or sell recommendations.