Macrotech Developers share had a forgettable debut largely due to a sharp selloff in markets and worries about the impact of the rising COVID-19 infections on the real estate segment. The stock settled with losses of 4.70 percent at Rs 463.15 on the BSE against an issue price of Rs 486, with volumes of 3.33 lakh equity shares.
It touched an intraday high of Rs 477.9 and a low of Rs 421.15 after opening 10 percent lower at Rs 439.
"We suggest retail investors who got the allotment of the IPO to exit at current market price and not to do any fresh buy," Yash Gupta, Equity Research Associate at Angel Broking told Moneycontrol.
"We have some concerns towards the company like high debt and not able to generate free cash flow and now in the fear of second wave of COVID-19 real estate sector may underperform the market."
On the National Stock Exchange, Macrotech Developers, earlier known as Lodha Developers, fell 4.27 percent to close at Rs 465.25, with volume of over 1.1 crore equity shares.
The Mumbai-based real estate company raised Rs 2,500 crore through public issue of which the net proceeds will be utilised towards debt repayment and acquisition or land or land development rights. The issue was subscribed 1.36 times when the issue closed on April 9.
"The company has a substantial amount of debt and contingent liabilities and the impact of COVID on the business is still uncertain. Moreover, the company is hugely focused on the Mumbai Metropolitan Region (MMR) region, which is worst affected by COVID, hence we advise the investors of this IPO to exit in case of any bounceback in the share price," said Saurabh Joshi, Research Analyst at Marwadi Shares and Finance.
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As on December 2020, Macrotech had 91 completed projects comprising approximately 77.22 million square feet of developable area, of which 59.13 million square feet is in affordable and mid-income housing, 12.15 million square feet in premium and luxury housing, 5.21 million square feet in office space and 0.74 million square feet is in retail space.
The company has 36 ongoing projects with developable area of 23.6 million square feet and has 18 planned projects with area of 45.1 million square feet. It possesses land reserve of around 3,803 acres in the MMR with the potential to develop projects admeasuring around 322 million square feet of developable area.
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