The public offer of real estate player Macrotech Developers has seen a subscription of 35 percent, with investors bidding for 1.26 crore equity shares against the IPO size of 3.64 crore equity shares by noon on April 8, the second day of bidding.
Retail investors who have been enthusiastic participants in initial public offerings have been slow to respond to Macrotech, an indication that they are cautious about investing in either the real estate sector or the market volatility seen since the middle of February, experts said.
The portion set aside for retail investors has been subscribed 25 percent and that of employees 10 percent. The company has reserved Rs 30 crore worth of shares for its employees.
Qualified institutional buyers have bid for 65 percent of their reserved portion and non-institutional investors 19 percent.
Macrotech Developers, formerly Lodha Developers, is looking to mop up Rs 2,500 crore through the IPO that closes on April 9. The price band has been fixed at Rs 483-486 a share.
"The company is bringing the issue at P/E multiple of 29x at the higher end of the price band of Rs 483-486 per share on FY20 EPS basis," said Hem Securities which likes the company's diversified portfolio across various price points and MMR micro markets.
Also read: Our in-house research team's take on Macrotech Developers IPO
"With the company's strong focus on affordable and mid-income housing segment, Macrotech is well-poised to cater to the opportunities present in the sector due to healthy prospects of real estate markets. However, subdued financial performance by the company with high debt act as a spoilsport," the brokerage said.
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"Although the company is committed to reducing debt and intends to bring to the level of net debt positive by FY24 which needs to be seen and infusing optimism in long term prospects of company. Therefore looking above all we recommend subscribe to the issue for long term perspective," Hem added.
One of India's largest residential real estate developers, the company has outperformed peers in sales performance since FY14-20.
Also read - Macrotech Developers IPO: 10 key things to know before subscribing the issue
This is the third attempt by the company to launch its IPO after it failed in 2009 and 2018 due to weak market conditions.
The company will utilise proceeds for repaying debts and acquiring land or land development rights.
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