Introduction:
The year 2023 has been a record-breaking year for Initial Public Offerings (IPOs) in India. The primary market has witnessed a plethora of companies from diverse sectors seeking to raise capital to fuel their growth plans. The reasons behind this IPO frenzy include favorable market conditions, increased investor appetite, and a robust regulatory framework.
One such company that’s planning to go public by the end of 2023 is Suraj Estate Developers Limited. A renowned name in India’s real estate sector, the company plans to raise up to Rs. 400 crores through the IPO to fund its land acquisition plans and general corporate purposes. Continue reading to delve into the details of Suraj Estate Developers IPO, including price band, lot size, listing date, and more.
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About Suraj Estate Developers Limited
Incorporated in 1986, Suraj Estate Developers Limited is a renowned real estate company with multiple residential and commercial projects across the South-Central Mumbai region. The company provides housing and commercial units in the value luxury and luxury segments. The company’s projects are in developing real estate markets, including Dadar, Mahim, Prabhadevi, Parel, and Bandra.
As of 31 September 2023, Suraj Estate Developers Ltd. have completed 42 projects with a cumulative carpet area of over 1.04 lakh square feet in the South-Central Mumbai region. Besides, the company has around 13 ongoing and 16 upcoming projects under its belt. The marquee projects of the company include Suraj Eleganza I and II, CCIL Bhavan, ICICI Apartments, Elizabeth Apartments, Jacob Apartments, and Glorisa Apartments.
Key Strengths of the Company
You can analyse the issuing company’s strengths to get insights into its future growth prospects and make an informed IPO investment decision. The key strengths of Suraj Estate Developers Ltd. include:
- A well-established real estate brand with a longstanding history in the value luxury and luxury segments within the South-Central Mumbai region
- The company has more than 37 years of experience in the industry
- The company’s marketing and sales teams are highly skilled and experienced
- The company has already identified land reserves in Bandra and Santacruz for future project developments
- Diversified product portfolio encompassing residential and commercial projects
- Extensive proficiency in handling tenant settlements within redevelopment projects
Key Risks or Weaknesses
Analysing a company's risks or vulnerabilities can provide insights into the threats that can hinder its sustained growth. Below are the key risks or weaknesses associated with Suraj Estate Developers Ltd.:
- The company require approvals from MHADA and MCGM for its redevelopment projects
- The inability to complete the projects within the stipulated time may harm the company’s reputation and business
- Operates in a highly competitive and fragmented industry
- The company operates exclusively in the South-Central Mumbai region
- For FY21, the company reported negative cashflows in operational activities
- The company requires significant working capital for land acquisition and development
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Core Financials of the Company
Suraj Estate Development Limited boasts robust financials, with the company’s net worth and operational revenue growing steadily in the last three years. The profit after tax has grown by five times in the last two years. The ROE for FY23 stood at a highly impressive 58%. To learn more about the company’s financials for the last three years, refer to the table below:
| Particulars |
For the Period Ended June 2023 |
As of and for FY Ended March 31 |
| 2023 |
2022 |
2021 |
| Share Capital |
16 |
16 |
16 |
6 |
| Net Worth |
86 |
71 |
39 |
29 |
| Total Borrowings |
599 |
593 |
638 |
600 |
| Revenue From Operations |
102 |
306 |
273 |
240 |
| EBITDA Adjusted |
47 |
151 |
132 |
87 |
| Profit After Tax |
15 |
32 |
27 |
6 |
| Earnings Per Share (Diluted) |
5 |
10 |
8 |
2 |
| Return on Equity |
19% |
58% |
77% |
24% |
*Amount in Crores
Source – RHP dates 6 December on the SEBI website
Details of the IPO
Suraj Estate Developers IPO opens for public subscription on Monday, 18 December 2023 and closes on Wednesday, 20 December 2023. It will be a completely fresh issue with no offer-for-sale component. Retail investors can apply for at least 41 shares (and in multiples thereof) in the price band of Rs. 340 to Rs. 360 per equity share.
The table below illustrates additional IPO details:
| IPO Date |
18 December to 20 December 2023 |
| Basis of Allotment |
21-Dec |
| Listing Date |
26-Dec |
| Face Value |
Rs. 5 per share |
| Price Band |
Rs. 340 to Rs. 360 |
| Lot Size |
41 shares |
| Total Issue Size |
Rs. 400 crores |
| Fresh Issue |
Rs. 400 crores |
| Issue Type |
Book Built Issue |
| Listing At |
NSE, BSE |
To conclude
Before investing in an IPO, you must analyse several factors, including the issuing company’s financials, Grey Market Premium (GMP), and the prevailing market conditions. You should also consider your investment goals and risk appetite. With Motilal Oswal, you can open a free Demat account and start investing in IPOs from the convenience of your home.
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