South India-based mid-market and affordable housing developer Shriram Properties Ltd, which launched its first public issue on December 8, will list its shares on December 20.
The Shriram group company is among the top five residential real estate developers in South India in terms of the number of units launched between 2012 and the third quarter of 2021 across Tier-I cities like Bengaluru, Chennai and Hyderabad.
The company raised Rs 600 crore from the public issue with subscription of 4.6 times and retail investors buying 12.72 times the portion booked for them. While non-institutional investors bid for 4.82 times their reserved portion, qualified institutional buyers and employees reserved shares 1.85 times and 1.25 times.
With a number of options available in the primary market, the investor interest in the Shriram Properties IPO seem to have fizzled out and it is now trading at a premium of only Rs 15 per share in the grey market, as per IPO watch, which tracks premium in the grey market for companies about to go listed.
Market experts say that this is an indication that investors might be able to score some listing gains at the time of listing of shares.
“It is transitioning from a real estate development model to a combination of real estate development and real estate services-based business model which will help improve the margins and profitability as well as return on capital, given the low capital-intensive nature of the company’s newer business model,” said a report from Hem Securities.
But looking after current financials which show losses on back of high interest costs, investors would like to see financial performance of the company in the coming quarters and then take fresh positions, the report said. This could be one of the reasons for low demand in the grey market for the company’s IPO.
Experts say that investors may also be wary of the possible impact of the Omicron variant of Corona virus on the real estate sector which may lead to extended losses for the company.
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