08 Dec , 2021 By : Kanchan Joshi
Real-estate developer Shriram Properties, part of Shriram Group, is set to roll out its initial public offering (IPO) for public subscription today which will conclude on December 10. The price band has been fixed at Rs113-118 per share. Shriram Properties has raised a little over Rs268 crore from anchor investors ahead of its IPO.
As of 10:35 am on day 1, Shriram Properties IPO has been subscribed 0.34 times with retail category overbooked 1.90 times, BSE data showed.
This public issue comprises fresh issuance of equity shares worth Rs250 crore and an offer for sale (OFS) of Rs350 crore. The firm has reduced its offer for sale size to Rs350 crore from Rs550 crore earlier.
As per market observers, Shriram Properties shares are commanding a premium (GMP) of Rs16 in the grey market today. The company's shares are expected to list on stock exchanges BSE and NSE on December 20, 2021.
Assigning a “Subscribe" rating for the issue, analysts at Choice Broking said that “SPL is among the leading residential real estate development companies in South India, with presence in key South India markets of Bengaluru and Chennai. These two cities are among the two key residential housing markets in India and will continue to be among the top cities in terms of growth. SPL’s business was severely impacted during the second wave of the pandemic and thus is likely to perform relatively better in the coming quarters."
The company plans to utilise the net proceeds from the fresh issue towards repayment and/ or pre-payment of debt and general corporate purposes.
“If we look at the financials of the company, the numbers don’t look good, company has reported degrowth of 20.7% in revenue from the operation and reported a negative profit after tax of Rs60 crore. If we look at valuations, IPO has been priced at price to book value of 2.27 times and peers like Sobha Limited, Prestige are trading at price to book value of around 3 times. We have a positive outlook on Shriram Properties Limited IPO," said Yash Gupta, Equity Research Analyst, Angel One.
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