Shriram Properties initial public offer (IPO) will open for subscription on December 8th, 2021, and close on December 10th, 2021. The south Indian based real estate developer is looking to raise Rs. 600 crores through the IPO. In this article, we take a closer look at the Shriram Properties IPO Review and its possible future prospects. Keep Reading to find out
Table of Contents
About the company
Founded in 2000, Shriram Properties forms part of the Shriram group. The south Indian based company is one of the top residential real estate developers in South India. They mainly focus on the development of properties in the mid-market and affordable price range.
As of 2021, the company has completed 29 projects covering 16.76 million square feet of the saleable area! Out of these 24 are located in Bangalore and Chennai. In addition to this, the company also has 35 projects which are under development and in the forthcoming stages. These projects aggregate to cover 46.72 million square feet of estimated saleable area.
The company’s other locations include Coimbatore, Visakhapatnam, and Kolkata. Shriram is also present in the mid-market premium and the luxury housing categories and office space categories.
When it comes to its financials the company we get to see another not so bright aspect. The company has made losses for the last 2 financial years. In addition to that, it also delivered losses in its recent quarter. The last time the company delivered profit was in FY19.
The company’s competitors include
- DLF
- Embassy Office
- Godrej Properties
- Oberoi Realty
- Prestige Estate
Grey Market Information
Shares of Star Health traded at a 17% premium in the grey market one day before the IPO. The shares are traded at a price of Rs.138. This gives it a premium of Rs 20 over the issue price band of Rs.113-118 per share.
Key IPO Information
M. Murali, Shriram Properties Holdings Pvt Ltd. and Shriram Group Executives Welfare Trust are the promoters of the company. The IPO includes an offer for sale which was reduced to Rs 350 crore from Rs 550 crore earlier. Shareholders participating in the OFS are Omega TC Sabre Holdings Pte, Tata Capital Financial Services, TPG Asia SF V Pte and Wsi/Wsqi V (XXXII) Mauritius Investors.
The company has appointed Axis Capital, ICICI Securities and Nomura Financial Advisory and Securities as the book running lead managers. KFin Technologies has been appointed as the registrar to the issue.
| Particulars | Details |
|---|---|
| IPO Size | ₹600.00 Cr |
| Fresh Issue | ₹250.00 Cr |
| Offer for Sale (OFS) | ₹350.00 Cr |
| Opening date | Dec 8, 2021 |
| Closing date | Dec 10, 2021 |
| Face Value | ₹10 per equity share |
| Price Band | ₹113 to ₹118 |
| Lot Size | 125 Shares |
| Minimum Lot Size | 1 |
| Maximum Lot Size | 13 |
| Listing Date | Dec 20, 2021 |
Purpose of the IPO
The net proceeds from the IPO will be utilised for the following purposes
- Prepayment and repayment of borrowing of the company and its subsidiaries. Its subsidiaries include Shriprop Structures, Global Entropolis and Bengal Shriram
- Other General corporate purposes
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In Closing
In this article, we covered the Shriram Properties IPO Review. The Initial Public Offering opens on December 8st and closes on December 10th. Analyst opinion remains divided on the issue. Analysts from Marwadi Financial Services assigned an avoid rating to the issue.
This was because of the company’s IPO valuation which they found to be expensive in comparison to other listed realty stocks. However, analysts at Religare Broking have a positive outlook towards the company. This is due to the current positive industry growth trends and Shriram’s strong brand presence and execution track record.
For investors, it can be a good opportunity to look into the company and apply for the IPO after analysing the prospects and strengths. Let us know what you think about the IPO in the comments below? Happy Investing!
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Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.
