Suraj Estate Developers IPO: 10 things to know before subscribing to Rs 400 crore issue

The IPO will open for subscription on December 18

Suraj Estate Developers Limited's initial public offering (IPO) will open for subscription on December 18. The Rs 400 crore public issue is entirely a fresh issue of 1.11 crore shares.

Here are 10 key things to know before subscribing to the offer:

1) IPO dates

The IPO will open for subscription on December 18 and will close on December 20.

2) Price Band

The price band for the issue has been fixed at Rs 340-360 a share.
3) Offer Details

The Suraj Estate Developers IPO comprises only a fresh issue of shares worth Rs 400 crore by the company and there is no offer-for-sale component.

4) Objectives of the Issue

The real estate developer will make use of net fresh issue proceeds for repaying debts amounting to Rs 285 crore, and Rs 35 crore will be utilised for the acquisition of land or land development rights in the Mumbai Metropolitan Region. The remaining fresh issue money will be set aside for general corporate purposes.

5) Lot Size

Investors can bid for a minimum of 41 equity shares and in multiples of 41 after that. The minimum amount of investment required by retail investors is Rs 13,940 ( 41 x 340 (lower price band)). At the upper band, the bidding amount will increase to Rs 14,760.

6) Company Profile

Incorporated in 1986, Suraj Estate Developers Limited is a real estate construction company. The company develops residential and commercial real estate in the South Central Mumbai region. The company does not provide any in-house construction services and is 100 percent dependent on third-party contractors for the construction services of its projects.

Suraj Estate Developers Limited has completed 42 projects in the South-Central Mumbai region.

7) Financials

Owned by Rajan Meenathakonil Thomas and family, the developer recorded 21 percent on-year growth in net profit at Rs 32.06 crore for the year ended March FY23, on revenue of Rs 305.7. In the quarter ended June FY24, its net profit stood at Rs 14.53 crore on revenue of Rs 102.41 crore.

8) Lead Managers

Iti Capital Ltd and Anand Rathi Securities Limited are the book-running lead managers of the Suraj Estate Developers IPO, while Link Intime India Private Ltd is the registrar for the issue.

9) Risks

i.) The company's business is capital-intensive and requires expenditures for land acquisition and development. Therefore, the company is heavily dependent on the availability of real estate financing, which may not be available on terms acceptable to us promptly or at all.

ii.) The company's subsidiaries have incurred losses in the last three fiscals which could have a material impact on the construction company's business, prospects, financial condition, cash flows and results of operations.

iii) Its promoter, certain members of the promoter group and directors and related entities have interests in several ventures, which are in businesses similar to Suraj's and this may result in potential conflicts of interest.

10) Listing Date

Suraj Estate Developers IPO will list on BSE, and NSE with a tentative listing date fixed as Tuesday, December 26, 2023.