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The initial public offering ( IPO ) of Arkade Developers , which opened for subscription on September 16, has been subscribed 42.7 times on Thursday so far, the last day of the bidding process. Around 1 pm, the issue witnessed robust demand from the non-institutional investors and the retail investors, subscribing to the issue over 100 times and 42 times respectively, followed by the qualified institutional buyers (QIBs) who had subscribed the issue by 90%.
Ahead of the issue opening, the GMP for Arkade Developers was at Rs 85, suggesting a 66% premium over the issue price at the upper price band. The issue is completely a fresh equity sale of Rs 410 crore. In the public offer, about 50% is reserved for qualified institutional buyers, 35% for retail investors, and the rest 15% for non-institutional investors.
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On a post-issue basis, the company trades 14.46x EV/EBITDA (FY24). We have a Subscribe rating for the issue," said Arihant Capital.
Other details The company proposes to utilize the net proceeds towards the development of their ongoing projects, and their upcoming projects and funding acquisition of future real estate projects and general corporate purposes. Arkade Developers is a leading real estate development company with a significant presence in Mumbai. Its operations are concentrated on the development of premium aspirational lifestyle residential premises in the region.
Also read: Bajaj Housing Finance shares tumble 11% in 2 days. Should you buy, sell or hold? As of June 2024, the company has developed 2.2 million square feet of residential property (including through partnership entities in which it holds the majority stake).
The business model prioritizes the development of high-end and premium budget sustainable residential projects, with an emphasis on aesthetic design and lifestyle amenities. While the company's initial projects were stand-alone residential buildings, their current portfolio of ongoing projects includes gated communities such as Arkade Nest, Arkade Crown and Arkade Aspire, Arkade Prime, and Arkade Aura. Arkade Developers revenue in FY24 increased 189% year-on-year to 635 crore, while net profit also more than doubled to Rs 123 crore in the same period.
Unistone Capital is the sole book-running Lead Manager (BRLM) to the issue. The equity shares of the company will be listed on BSE and NSE. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own.
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