Shriram Properties IPO: Shriram Properties Limited, a leading real estate development firm based in south India, is set to open its initial public offering on December 8, Wednesday. The Shriram Properties IPO will be open for a three day bidding process between December 8 and December 10, the company has announced. The firm, which mainly has its focus on the mid-market and affordable housing segments, south India in terms of the number of units launched between the CY12 and the Q3CY21 across Tier 1 cities of the region. However, despite this, Shriram Properties has been posting losses for the past two years, with a decline in revenue growth.
Here are 10 Key Things to Know about Shriram Properties IPO
1. Shriram Properties IPO Dates: Shriram Properties Limited has set the opening date as December 8. The public issue will be open for bidding for three days before closing on December 10, Friday.
2. Shriram Properties IPO Price: The price band of the issue has been fixed at Rs 113 to Rs 118 per equity share, with a face value of Rs 10 each.
3. Offer Details: The offer comprises of a fresh issue worth Rs 250 crore and an offer for sale by existing shareholders worth Rs 350 crore. Investors including Omega TC Sabre Holdings Pte Ltd , Tata Capital Financial Services , TPG Asia SF V Pte Ltd, and WSI/WSQI V (XXXII) Mauritius Investors will drop their shares during the offer. Other shareholders will also drop Rs 25 crore during the issue. The Shriram Properties IPO is likely to fetch Rs 600 crore at the upper price band.
4. Objectives of Issue: The company will use the proceeds from the fresh issue for repayment and/ or pre-payment, in full or part, of certain borrowings availed by it and its subsidiaries. The fund will also be used for general corporate purposes.
5. Shriram Properties IPO GMP: As per the different market reports grey market premium (GMP) is fluctuating between Rs 20 to Rs 25 since the announcement of the IPO. On December 7, the Shriram Property shares were fetching a premium of Rs 20 at the grey market.
6. Lot size and Reserved Portion: Investors are allowed to bit a minimum of 125 equity shares and in multiples of 125 equity shares thereof. Retail individuals can bid for a minimum of one lot and a maximum of 13. One lot of the Shriram Properties IPO will cost Rs 14,750 at the upper end of the price band.
Shriram Properties has 75 per cent of the issue reserved for qualified institutional buyers (QIBs), 15 per cent for non-institutional investors (NIIs) and 10 per cent for retail investors.
7. Runners of the Issue: Axis Capital Ltd., ICICI Securities Ltd. and Nomura Financial Advisory and Securities (India) Pvt. Ltd are the lead book running managers to the Shriram Properties IPO. KFinTech Ltd is the registrar of the issue.
8. Key Risks: The financial performance has been tepid with a decline in revenue growth from FY19-21. Moreover, the company has posted losses for the past two consecutive years. Looking at the financials of the company, the numbers don’t look good, company has reported de-growth of 20.7 per cent in revenue from the operation and reported a negative profit after tax of Rs 60 crores. Given the price range of the issue, investors could be at a great risk as the offer is mostly an OFS.
9. Company Profile: Incorporated in 2000, Shriram Properties is part of the Shriram Group, which is a prominent business group with four decades of operating history in India and a well-recognised brand in the retail financial services sector and several other industries. Shriram Properties is primarily focused on the mid-market and affordable housing categories. It is among the top five residential real estate companies in south India, As of September 30, 2021, it has 29 completed projects, representing 16.76 million square feet of saleable area, out of which its 24 completed projects in the cities of Bengaluru and Chennai accounted for 90.56 per cent of its saleable area.
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