Arkade Developers IPO subscribed 16 times on Day 2; should you apply?

Arkade Developers IPO, Arkade Developers IPO Subscription Status: Mumbai-headquartered real estate developer Arkade Developers’ initial public offer (IPO) was subscribed 16.2 times on Tuesday, the second day of the bidding process. By the end of the day, the IPO registered bids for 38.5 crore shares as against the 2.4 crore shares on offer, according to provisional exchange data.

The portions reserved for qualified institutional buyers (QIBs) and non-institutional investors (NIIs) were subscribed 44 per cent and 28.3 times, respectively. The portions reserved for retail investors and employees were booked 20 times and 19.25 times, respectively.

The IPO was fully subscribed on the first day of the bidding process.

Ahead of the opening of the subscription window, Arkade Developers raised Rs 122.4 crore from anchor investors.

The IPO of Arkade Developers comprises fresh issuance of Rs 410 crore, which means that the wholse proceeds of the offer will go to the company.

The real estate company plans to utilise the funds raised to acquire new land and complete its ongoing projects. It does not intend to use the proceeds to pay down debt.

Should you subscribe to Arkade Developers IPO? Here's what market guru Anil Singhvi suggests

Zee Business Managing Editor Anil Singhvi suggests applying for the IPO for a reasonable listing gain and from a medium-term perspective. The market wizard has highlighted the following key points about the company:

Positive:

• Experienced management team
• Proven track record of timely project completion
• Strong financial performance over the past three years
• Robust pipeline of current and upcoming projects
• Attractive valuations

Negative

• Limited focus on Mumbai’s western suburbs
• High level of competition in the real estate sector

SBI Securities recommends subscribing to the Arkade Developers IPO, citing potential for both short-term listing gains and long-term investment value.

"At the upper price band of Rs 128, the IPO is valued at a FY24 P/E multiple of 19.3x," analysts at the brokerage wrote in a report dated September 14.

What does Arkade Developers do?

Arkade Developers specialises in the development of premium residential properties in Mumbai. Their operations include both the development and construction of new residential projects and the redevelopment of existing properties.

The company has developed 2.2 million square feet of residential space and has a history of completing projects on time, according to the brokerage.

Between 2017 and Q1 2023, the real estate company launched 1,040 residential units and sold 792 units in the MMR.

Here are some important details about the Arkade Developers IPO:

• Price band: Rs 121-Rs 128/share
• Fresh issue size: Rs 410 crore
• Total issue size: Rs. 410 crore
• Number of shares: 3,38,84,298-3,20,31,250
• Face value: Rs 10/share
• Post-issue market capitalisation: Rs 2,269 crore - Rs 2,376 crore
• Bid lot: 110 shares
• Investor reservation:
• QIBs: 50 per cent
• Retail investors: 35 per cent
• NIIs: 15 per cent

IPO Management

• Book Running Lead Managers (BRLMs): Unistone Capital Private Limited
• Registrar to the Issue: Bigshare Services Private Limited

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