Lodha Defers IPO Launch As Stock Market Faces Unrest
The troubled stock market has forced Lodha group to delay its proposed initial public offer. It was in July when Lodha Group had received a go-ahead from markets regulator, the Securities and Exchange Board of India (Sebi) to launch its IPO, nine years after the Mumbai-based real estate giant first attempted to go public. In September 2009, the relator had first filed a prospectus for the IPO launch, but weak market conditions forced it to withdraw the same.
Apart from the delay, the issue size may also get reduced to reflect the revised group valuation. The total fund raise may get revised to Rs 4,000-4,500 crore from Rs 5,500 crore.
In the meantime, the developer, which is the country’s biggest builders as far as sales numbers go, strengthened its position in the market. Despite a slowdown in the market, Lodha Group, which is primarily known for its luxury commercial and residential offerings, registered new sales worth Rs 6,966 crore in the financial year 2016-17. In nine months ending December last year, the company clocked sales worth Rs 5,482 crore.
This time, the company filed the draft red herring in April and is expected to launch the IPO in the coming two to three months. The realtor has recruited CLSA, Kotak Investment Banking, Morgan Stanley and JM Financial to manage the IPO.
The offering would be the country’s second-biggest property IPO ─ real estate giant DLF’s IPO of 2007 fetched the company Rs 9,200 crore, the highest in the country so far. The company would use the proceeds to cut its outstanding debts. As on December-end, the realtor has a debt of Rs 17,000 crore. However, the proposed offering would increase the realtor’s market capitalisation to Rs 38,000 crore, higher than DLF’s Rs 33,500-crore market value.
With a vision of "Building A Better Life", the company is developing an estimated 33.8 million square foot (sqft) of prime real estate with large land reserves in the Mumbai Metropolitan Region (MMR). The company which also has presence in the United Kingdom has as many as 37 ongoing projects across Mumbai, Pune and London. Lodha Group also has land reserves of over 4,450 acre, with an estimated saleable area of 385 million sqft as of December 2017.