Suraj Estate Developers IPO opens on December 18, to raise Rs 400 crore

Suraj Estate IPO to open on December 18

Mumbai-based Suraj Estate Developers has decided to launch its initial public offering on December 18, to raise Rs 400 crore. This would be the second offering opening this month after Doms Industries.

The anchor book of the issue will be opened for a day on December 15, while the offer will close on third day, i.e. December 20.

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

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 acquisition of land or land development rights in Mumbai Metropolitan Region. The remaining fresh issue money will be set aside for general corporate purposes.

It has total outstanding consolidated borrowing at Rs 568.83 crore, as of September 2023.

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The company intends to utilise the entire amount kept for the acquisition of land or land development rights during FY24-FY25.

"We are evaluating land and land development opportunities in Bandra (west) region to cater to the demand in the residential luxury segment offering 2, 3 and 4 BHK apartments," Suraj Estate said.

The company further said, "In the Dadar (west) and Mahim (west) micro market of the South Central Mumbai, we are evaluating land and land development opportunities to cater to the demand in the residential value luxury segment offering 1 and 2 BHK apartments."

Since 1986, the firm has completed 42 projects with a developed area of more than 1.05 million square feet in the South-Central Mumbai region. In addition, it has 13 ongoing projects with a developable area of 2.03 million square feet and saleable carpet area 0.6 million square feet and 16 upcoming projects with an estimated carpet area of 0.7 million square feet.

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Suraj Estate, which is owned by Rajan Meenathakonil Thomas and family, has 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 crore that increased by 12.1 percent compared to previous year. EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 14.6 percent on-year to Rs 151 crore with margin expansion of 110 bps at 49.4 percent during the year due to lower input cost.

Net profit for the quarter ended June FY24 stood at Rs 14.53 crore on revenue of Rs 102.41 crore.

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ITI Capital and Anand Rathi Advisors are the merchant bankers to the issue.