Macrotech Developers trims debt by 55% to Rs 3,010 crore in March quarter

Realty firm Macrotech Developers Ltd has reduced its net debt by 55 per cent in the fourth quarter of the last fiscal to Rs 3,010 crore with the help of internal accruals and equity fundraising.
Its net debt stood at Rs 6,750 crore as of December 31, 2023. Macrotech Developers, which sells properties under the brand Lodha, is one of the leading real estate developers in India. The company's net debt stood at Rs 3,010 crore as of March 31, 2024, down 55 per cent from the previous quarter, according to a regulatory filing.

The net debt is 57 per cent lower than Rs 7,070 crore at the end of the 2022-23 fiscal. Surplus cash flow generated from the business, coupled with the raising of equity capital, helped the company in reducing the net debt. "On the back of strong operating cash flow generation and recently concluded equity raise, our net debt further reduced to Rs 3,010 crore," the company said. The company had a target to bring down the net borrowings to Rs 6,000 crore level by March this year. However, it was able to trim the debt significantly, thanks to equity capital raise last month and growth in sale bookings. Last month, Macrotech Developers Ltd raised Rs 3,300 crore by selling shares to institutional investors.

The company successfully closed its qualified institutional placement (QIP), which was oversubscribed nearly 3 times and witnessed traction from a diversified set of investors, including sovereign funds, pension funds and insurers. This was the fourth equity raise by Macrotech Developers in the last 36 months. It has raised over Rs 13,000 crore as equity cumulatively. Its existing shareholders like Capital Group, GQG, Nomura, ADIA, and HDFC Life enhanced their investment through this QIP.

The institutional placement also saw new investors like Invesco Oppenheimer, Blackrock, Carmignac, Franklin Templeton, Norges, Lazard, APG and RWC participating in the latest funding round.
"The significant demand from marquee investors enabled us to launch and close the QIP within hours of opening the book, a tremendous feat for the Indian housing industry," said Abhishek Lodha, Managing Director & Chief Executive Officer of Macrotech Developers.

With this capital raise, he had said that the company's balance sheet has strengthened and would also help in improving profitability. Apart from equity capital raise, the company has been clocking healthy sales bookings and collection from customers against sales. In 2023-24, Macrotech Developers registered a 20 per cent growth in its sales bookings to a record Rs 14,520 crore from Rs 12,060 crore in the previous financial year.

With this record of pre-sales or sales bookings, the company said that it has met the guidance of delivering consistent and predictable 20 per cent growth. On the overall property market, Lodha strongly feels that the housing industry is going to play a pivotal role in the country's transition from a low-income economy to a mid-income economy by the end of the decade. "During this period, housing is going to be the key beneficiary as well as the driver of economic growth," he had said last month. Lodha noted that all the structural factors are in place for significant growth in volumes. "We are in only the fourth year of a multi-decade-long housing cycle," Lodha had said.

Mumbai-based Macrotech Developers has a significant presence in Mumbai Metropolitan Region (MMR) and Pune. It has recently entered into Bengaluru housing market. The company has delivered 95 million square feet of real estate and is currently developing more than 110 million square feet under its ongoing and planned portfolio. Macrotech Developers buys land outright and also partners with landlords to create a land bank for future development.