Suraj Estate Developers IPO: Papers filed with Sebi to raise Rs 500 cr - What we know so far

Suraj Estate Developers IPO: Real estate player Suraj Estate Developers which is based out of Mumbai has filed its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) for initial public offering (IPO).

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There are certain things about the Suraj Estate Developers IPO that the investors must know. These are as follows:

1) Amount to raise: Suraj Estate Developers has filed its DRHP to raise Rs 500 crore through an IPO with a fresh issue of shares.

2) Objective of the IPO: The proceeds from its fresh issuance worth Rs. 315 crores for the repayment or prepayment of borrowings, in full or part of all or certain borrowings for the company and its subsidairy, Rs 45 crore for acquisition of land or land development rights besides general corporate purposes, as per DRHP.

3) IPO issue price: The issue has a face value of Rs 5 per equity share for the proposed share sale, as per DRHP.

4) IPO offer details: According to the DRHP filed, the Offer is being made through the book building process, where at least 75 per cent of the offer will be available for allocation to qualified institutional buyers. Also, not more than 15 per cent of the offer will be available for allocation to non-institutional bidders and not more than 10 per cent of the offer will be available for allocation to retail individual bidders.

5) Book Running Lead Manager and registrar: Centrum Capital Limited and Anand Rathi Advisors Limited are the book running lead managers to the issue.

6) Company details: Suraj Estate Developers has been developing residential and commercial properties throughout the South Central Mumbai region. The realtor through its emphasis on contemporary architecture, strong project execution capabilities, and quality construction, the real estate developers have established a strong brand and a successful track record in the real estate industry.

7) Market share: The company is among the top two developers with 15.25 per cent market share in terms of supply and rank third with 13.50 per cent market share in terms of absorption in the residential sub-markets of Mahim, Matunga, Dadar, Prabhadevi, and Parel in South Central Mumbai region for calendar years 2016 to 2021.

8) Company operations: In the South Central Mumbai region, it has completed 42 projects with a total developed area of over 1,046,543 square feet. It also has nine ongoing projects with a total developable area of 1,970,445 square feet and a saleable RERA carpet area of 442,616 square feet, as well as 21 upcoming projects with a total carpet area of 928,400 square feet. It is present in the residential portfolio spanning numerous price points in the 'value luxury' and 'luxury' segments, with unit values ranging from Rs 10 million to Rs 130 million.

9) Future plans: The company has land parcels in Bandra (West) and Santacruz (East) that will be developed in the future. It had Land Reserves of 10,359.77 square metres as of December 31, 2021, which it aims to grow in the coming years by utilising the complete FSI potential of more than index 2.0, subject to marketability and governmental clearances.

10) Revenue: Suraj Estate Developers clocked a profit of Rs 6.28 crore in the financial year FY21 against Rs 1.52 crore in the previous year. The revenue during the year FY21 increased significantly to Rs 239.99 crore from Rs 86.93 crore in the previous year, an increase of 176.08 per cent, primarily due to increase in sales on account of increase in sale volume of its projects namely, Palette (Dadar) and Ocean Star (Prabhadevi) and reduction of stamp duty from 5 per cent to 2 per cent. The profit for the seven-months period ended October 2021 stood at Rs 11.90 crore on revenue of Rs 109.62 crore.