Kalpataru shares likely to see flat listing tomorrow; here's what market experts say

Kalpataru IPO

Kalpataru shares are set to make their stock market debut tomorrow (July 1). While grey market estimates hint at a muted listing, market experts suggest investors to look at the scrip for the long term.

The real estate developer's Rs 1,590-crore IPO saw decent investor interest during its three days of public bidding, being subscribed 2.26 times between June 24-26. Retail individual investors booked their reserved portion 1.29 times, while non-institutional investors (NII) subscribed the portion kept for them 1.31 times. Qualified Institutional Buyers (QIBs) led the subscription numbers with 3.12 times subscription.

The Mumbai-based real estate player had launched its maiden issue to raise up to Rs 1,590 crore through an IPO which entirely comprises a fresh issue of shares at a price band of Rs 387-414 apiece.

Kalpataru IPO GMP:

Unlisted shares of Kalpataru were trading flat with zero grey market premium (GMP) over the IPO price at Rs 414 apiece, as per Investorgain. The GMP has fallen from the around 2 percent GMP with which the unlisted shares were trading in the unofficial market, before the IPO opened for public bidding.

As per IPO Watch, the unlisted shares were trading with a 1 percent GMP at Rs 418 apiece.

Here's what analysts expect:

Market analysts have noted that the scrip may be suitable for long term returns, and not short term gains. Bhavik Joshi, Business Head at INVasset PMS, said, "Its Rs 387–414 share band received a 2.26× overall subscription, buoyed largely by institutional interest (3.12× QIBs), while retail and NIIs showed tepid uptake (~1.3×) . A hefty ₹708 crore in anchor commitments at ₹414 suggests institutional validation, though grey-market signals of Rs 3–6 point to a near-par listing at Rs 417—a modest upswing."

"Kalpataru, though brand-rich and asset-heavy with Rs 1,900 acres under development, is still working through zero-to-low margins and debt-heavy balance sheets—hence the bulk of IPO proceeds going into debt reduction . Valuation stands aggressive—about 186× EV/EBITDA—raising justified caution from analysts . The offer is positioned more as a long-haul strategy, betting on realty recovery and project execution across India’s major metros. The muted retail interest mirrors broader valuations concerns," he added.

Joshi concluded, "Kalpataru, though grounded in a storied legacy and long-term assets, demands patience."

The analysts at Bajaj Broking had recommended investors to subscribe the IPO with a long-term perspective. "The strength of Kalpataru is driven by its track record of delivering quality projects. It has a customer-centric approach and seek to address customers’ requirements and preferences, which in turn enhances its brand recognition. The 'Kalpataru' brand name is used by it pursuant to an intellectual property license agreement dated July 1, 2022 with Kalpataru Business Solutions Private Limited, one of our Group Companies," the analysts said in a note.

Gaurav Garg from Lemonn Markets Desk, noted "Kalpataru Limited's IPO presents a high-conviction bet on brand strength in Mumbai real estate, supported by a sizable project pipeline and significant land bank. The company's green development credentials and operational focus add merit to its long-term positioning. However, the success of this offering will rest on the company’s ability to deliver profitable growth, reduce leverage, and compete effectively against better-capitalized peers. Risk-averse investors may await more consistent earnings visibility post-listing, while aggressive investors looking for turnaround stories with strong asset backing may find this IPO compelling."

The group has a multi-national presence and has operations in EPC contracting for power transmission and distribution, oil and gas, railways, civil infrastructure projects, warehousing and logistics, and facility management.

Earlier, the company raised Rs 708 crore from anchor investors a day ahead of the launch of its initial public offering (IPO) for public subscription. It proposes to utilise funds for the payment of debt and general corporate purposes.

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