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Macrotech Developers' shares drop after weak market debut
The IPO of Macrotech Developers was subscribed 1.36 times in its third attempt to launch a public issue and list its shares on stock exchanges.
Shares of Macrotech Developers Ltd, India’s biggest homebuilder formerly known as Lodha Developers Ltd, dropped as much as 13% in their long-awaited market debut on Monday. Shares of Macrotech dropped to as low as ₹421.15, compared with the initial public offering price of ₹486. The Mumbai-based company launched its initial public offer (IPO) on April 7 to raise ₹2,500 crore through fresh issue of shares. The issue with a price band of ₹483-486 per share closed on April 9.
The IPO of Macrotech Developers was subscribed 1.36 times in its third attempt to launch a public issue and list its shares on stock exchanges. The company plans to use the IPO proceeds for reducing debt by up to ₹1,500 crore and acquire land or land developmental rights aggregating up to ₹375 crore. The company in 2009 and 2018 filed IPO documents and also got SEBI approval but did not hit the capital market. Amid a global equity rout in October 2018, caused by concerns about geopolitical tensions and rising interest rates, forced the company to shelve its plan then.
The oversubscribed IPO saw participation from institutional investors, including a unit of Nomura Holdings Inc. and the real estate arm of Canadian pension fund Caisse de Dépôt et Placement du Québec. Managers included Axis Capital Ltd, JPMorgan India Pvt and Kotak Mahindra Capital Co.
"We are the largest developer in terms of sales bookings in India. We have sold properties worth over ₹50,000 crore in the last seven years," Macrotech Developers MD Abhishek Lodha told reporters earlier this month. Lodha had said the company's net debt for India business is ₹16,700 crore as on December 31, 2020. "Our debt will come down to ₹12,700 crore after the IPO," he added.
Macrotech Developers' revenue from operations stood at ₹9,580 crore in 2019-20. In the first nine months of the last fiscal, revenue stood at ₹2,920 crore. The company posted a profit of ₹1,210 crore in 2019-20 but suffered a loss of ₹260 crore in April-December period of last fiscal year due to the coronavirus pandemic. The company's sales booking stood at about ₹6,600 crore in 2019-20. Its sales bookings stood at nearly ₹3400 crore in the first nine months of last fiscal year, of which around ₹2,500 crore were achieved in December quarter.
Macrotech Developers was founded in 1995 by Mangal Prabhat Lodha.
(With agency inputs)
