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Keystone Realtors unlikely to see good premium on listing today

Neither the grey market suggest any big listing premium for Keystone Realtors. Its shares traded with just half a percent to one percent premium in the unlisted market, analysts said.

November 24, 2022 / 06:27 AM IST
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Keystone Realtors, a prominent real estate developer under the Rustomjee brand, is unlikely to see a great listing on the back of a muted response to its maiden public issue, underperformance of realty space amid rising interest rates in current financial year, and a bit of expensive valuations, despite a strong brand name and impressive financial track record, experts said.

According to them, the listing may be at par or with moderate premium over its issue price of Rs 541 per share.

The well-known brand in the Mumbai Metropolitan Area (MMR) saw its IPO being subscribed just 2.01 times during November 14-16, backed by qualified institutional buyers (QIB) and high networth individuals (HNIs).

Qualified institutional buyers bought shares 3.84 times the allotted quota and high networth individuals three times their share, but retail investors stayed tepid to the issue, bidding for just 53 percent of the portion set aside for them.

Keystone is the last debut among the IPOs launched this month. "Keystone Realtors IPO price band is bit expensive as per the valuations. It may list at a minor premium or around issue price," Dr Ravi Singh, Vice President and Head of Research at Share India, said.

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Manoj Dalmia, Founder and Director at Proficient Equities too does not expect huge listing gains.

Neither the grey market suggests any big listing premium for Keystone Realtors. Its shares traded with just half a percent to one percent premium in the unlisted market, analysts said.

Keystone Realtors is engaged primarily in the business of real estate construction, development and other related activities in India.

"Despite a strong premium brand name (Rustomjee) and optimistic undertone in the broader markets, the Keystone Realtors offer failed to garner investors' interest which can be the reason for subdued interest in grey market as well," Prashanth Tapse, Senior VP Research at Mehta Equities, said.

He further said the muted response across investor categories followed by fully priced-in IPO valuations would be the factors for muted-to-flat listing gains in the best case scenario.

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If we recall the Macrotech Developers (Lodha) IPO, which also received similar kind of response from investors and listed below issue price, its post-listing performance was outstanding, surprising the market as it rallied over three-fold during April-November 2021, followed by corrections.

Most of analysts had advised long-term investment during the IPO. Considering growth prospects with projects in hand and also expectations of the Indian real estate sector going to do well in the next two-three years, Tapse remains optimistic on Keystone Realtors.

The company has a good financial track record and has generated stable profits in the past 3 years with a diverse category of projects in hand. Operating revenue recorded a CAGR of 2 percent during FY20-FY22 and EBITDA (earnings before interest, tax, depreciation and amortisation) averaged a 15 percent growth during the period, while the operating profit margin has registered good expansion to 14.1 percent in FY22, from 13.4 percent in FY21 and 11.2 percent in FY20.

Profit posted a CAGR of more than 200 percent to Rs 136 crore during FY20-FY22, driven by lower interest cost, though it plunged over 40 percent in FY22 compared to FY21. The company has improved its debt-to-equity ratio to 1.6 times in the year ended March 2022, from nine times in FY20.

As of June 2022, Keystone has completed 32 projects, there are 12 ongoing projects and 21 forthcoming projects across the MMR, under the ‘Rustomjee’ brand.

If we look at the real estate performance of last one year, especially after its record high, then Nifty Realty is the biggest underperformer compared to all, falling more than 20 percent against 1 percent gains reported by Nifty50.

Disclaimer: The views and investment tips expressed by investment experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.
Sunil Shankar Matkar
first published: Nov 23, 2022 03:04 pm