Shriram Properties IPO Listing: Shares may debut on exchanges below its issue price, says Anil Singhvi

Shares of Shriram Properties Limited will be listed on the exchanges on Monday, December 20, 2021. The initial public offering of one of the biggest players in real estate was booked 4.6 times on the final day of subscription on December 10.

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The Chennai-based residential real estate development company aims to raise Rs 600 crore via the public issue.  

Ahead of the listing today, Zee Business Managing Editor Anil Singhvi said the public offer is very likely to be listed on the bourses below its issue price of Rs 118 per share. He suggested short-term investors to keep a stoploss of Rs110.  

Earlier, Aayush Agrawal, senior analyst, Swastika Investmart Ltd, also said that that Sriram Properties may see a weak listing due to Covid affecting this sector.    

"Although the company has a strong brand name in South India, but during COVID, when real estate was booming, the company suffered losses," he said.  

"Shriram Properties has an MCAP/Sales ratio of 4.6x, while its peers Sobha, Puravankara, and Prestige offer 3.8x, 3.3x, and 2.4x respectively. The grey market premium currently trades between 8-10%. Given the current market trends, we might see a comparatively weak listing," said Agrawal.    

Yash Gupta, Equity Research Analyst, Angel One Ltd, had earlier highlighted that the company has reported a negative profit after tax of Rs 60 crore in the first half of 2022 along with that it has also reported a negative profit after tax of Rs 68.1 crores in 2021. "Company has reported degrowth in revenue for the past 2 years. In 2021, the company reported revenue of ₹501 crores down by 20.7% from Rs 631.8 crores in 2020," he had said.  

Shriram Properties mainly focuses on mid-market and affordable housing segment, having some projects in luxury housing also.  

The company had fixed a price band of Rs 113 – Rs 118 for this IPO. Total issue size of Rs 600 crore comprises Rs250 crores of fresh issue and an offer for sale of ₹350. The company has fixed the market lot of 125 shares. Minimum order quantity is one lot and the maximum subscription amount for retail investors is Rs 2 lakh, while for eligible employees it is Rs 5 lakh.