Rustomjee group firm Keystone Realtors files IPO papers to raise Rs 850 crore

Rustomjee group company Keystone Realtors has filed a draft red herring prospectus with Securities Exchange Board of India to raise around Rs 850 crore via initial public offering.

The IPO comprises a fresh issue of Rs 700 crore and an offer for sale (OFS) of up to Rs 150 crore by its existing shareholders and promoters.

The OFS consists of up to Rs 75 crore by Boman Rustom Irani, up to Rs 37.50 crore by Percy Soraji Chowdhry and up to Rs 37.50 crore by Chandresh Dinesh Mehta.

The proceeds from the issue worth Rs 427 crore will be used to repay debt availed by its subsidiaries. The firm will also use the rest of the money for funding acquisition of future real estate projects and general corporate purposes.

Axis Capital and Credit Suisse are the book running lead managers to the issue.

The firm reported consolidated revenue of Rs 848.72 crore in fiscal year 2021 against Rs 1211.47 crore in FY20. Net profit for the year stood at Rs 231.82 crore versus Rs 14.50 crore a year ago. As of December 2021, its total debt stood at Rs 1439.18 crore.

It is one of the prominent real estate developers (in terms of absorption in number of units) in the micro markets. It has presence in Juhu, Bandra East, Khar, Bhandup, Virar and Thane. They are able to garner premium pricing in the MMR micro-markets where its projects are located.

As of March 31, 2022, the firm had 32 completed projects, 12 ongoing projects and 19 forthcoming projects across the Mumbai Metropolitan Region (MMR) that includes a comprehensive range of projects under the affordable, mid and mass, aspirational, premium and super premium categories, all under its Rustomjee brand. It has developed 20.05 million square feet of high-value and affordable residential buildings, premium gated estates, townships, corporate parks, retail spaces, schools, iconic landmarks and various other real estate projects.