Macrotech Developers, earlier known as Lodha Developers, is set to debut on the bourses on April 19 after closing the issue on April 9 and will credit equity shares to demat accounts of eligible investors this week.
Analysts largely expect a muted listing of the Mumbai-based real estate developer on April 19 given the tepid subscription and equity market volatility.
The grey market also seems to be less enthused about the debut, as currently Macrotech shares have traded at a premium of Rs 5-15 in the grey market, i.e. Rs 491-501 against the issue price of Rs 486 per share, the data available on IPO Watch, IPO Central and IPO Guru showed.
"There has been a muted response to Macrotech Developers (Lodha Developers) as the issue was not able to impress primary market participants. In my opinion, listing will be flat, and we can see profit booking on listing day as well because of the dampened market sentiments currently," Gaurav Garg, Head of Research at CapitalVia Global Research told Moneycontrol.
Real estate players, generally, will also be negatively impacted if lockdown restrictions continue to go further, he said.
The Rs 2,500-crore public issue of Macrotech Developers was launched when the market turned more volatile amid rapidly spreading coronavirus infections, which is also called the second wave of COVID-19 cases.
The IPO was subscribed 1.36 times during April 7-9, as the portion set aside for qualified institutional buyers witnessed 3.05 times subscription, non-institutional investors 1.44 times and retail 40 percent.
In fact, it was the lowest subscription received by any IPO since October 2019.
"Macrotech Developers IPO finally sailed through with a tepid response from all category of investors as the uncertainty and fear of COVID-19 second wave spooked investors sentiment in the primary market as well as in the secondary market. Overall subscription numbers were not encouraging to meet up market demand for healthy listing gain as the final day the numbers are indicating that investors were reluctant to invest in this IPO," Prashanth Tapse, AVP Research at Mehta Equities said.
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"Given that the market sentiment is still alarming and volatile following the re-emergence of COVID-19 infections, we can see a muted debut," Tapse added.
On valuation parse, Macrotech is asking for a market cap of Rs 21,739 crore with inconsistency in topline following declining bottomline for the concluded three fiscals raised concern and the current pandemic has shown the worst impact on the company's performance hence considering all the factors listing would be muted, Tapse feels.
Macrotech Developers managed to raise funds via IPO in its third attempt as the first two attempts -- in 2009 and 2018 -- failed due to weak market sentiments.
The real estate company will utilise IPO proceeds for repaying of debts and acquisition of land or land development rights.
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