The public issue of Signature Global (India) continued to get decent response from investors, subscribing 1.61 times so far on the second day of bidding, September 21 with bids for 1.81 crore equity shares against offer size of 1.12 crore shares.
High networth individuals (non-institutional investors) and retail investors looked aggressive in terms of bidding, buying 3.06 times and 2.53 times the allotted quota, which is 15 percent and 10 percent of the offer size, respectively.
Qualified institutional buyers have bid for 62 percent shares of the reserved portion which is 75 percent of the issue size.
The Rs 730-crore public issue of the real estate developer was subscribed 54 percent on its first day of bidding, September 20.
The Delhi NCR-based affordable housing company aims to raise Rs 603 crore via fresh issue and Rs 127 crore through offer-for-sale (OFS) at the upper price band. International Finance Corporation is the only seller in the OFS.
The price band for the offer, which closes on September 22, has been fixed at Rs 366-385 per share.
Also read: Signature Global Rs 730 crore IPO opens, aims to turn profitable by FY26
Signature Global with operations in the National Capital Region of Delhi is going to repay its own debts of Rs 264 crore and debts worth Rs 168 crore of its four subsidiaries will be repaid through net fresh issue proceeds. The debts on the books of the company were Rs 495.26 crore and its four subsidiaries at Rs 123.86 crore as of June 2023.
The remaining funds will be utilised for inorganic growth through land acquisitions and general corporate purposes.
The company focussing on offering affordable and mid-segment housing in terms of units supplied has reported losses in the past financial years. The net loss for the year ended March FY23 stood at Rs 63.7 crore, narrowed from loss of Rs 115.5 crore in previous year, but revenue from operations increased significantly to Rs 1,553.6 crore from Rs 901.3 crore during the same period.
Also read: Ahead of IPO, Signature Global mobilises Rs 318 crore from anchor investors
Signature Global has completed several real estate projects under the DDJAY – APHP (The Affordable Plotted Housing Policy or the Deen Dayal Jan Awas
Yojana (DDJAY - APHP). There are 29 ongoing and 19 forthcoming projects over 216.57 and 379.07 acres of land respectively.
The company’s revenue is primarily concentrated in Delhi NCR, Gurugram and Haryana regions. Any supply demand fluctuations in the region may impact the company’s operations, Sushil Finance said.
The issue is priced at a P/BV (price-to-book value) of 101.05 based on its NAV of Rs 3.81. The company has posted losses for the last three fiscals. Keeping in mind the real estate industry & fluctuating demand style is a concern, the brokerage feels.
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Looking at both opportunities and challenges faced by the company and keeping the further performance of the company, Sushil Finance advised cautious investing by cash surplus investors as and when the performance turns around.
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