Shriram Properties Pvt. Ltd and Puranik Builders Pvt. Ltd could be next in the queue to launch initial public offerings (IPOs), hoping to exploit a surge in demand for primary market offerings, said three people familiar with the matter.
The two real estate firms will follow Macrotech Developers, formerly known as Lodha Developers, which filed its draft prospectus earlier this week, in its third attempt.
Bengaluru-based Shriram Properties and Mumbai’s Puranik Builders, both residential-focused developers, had filed draft red herring prospectus (DRHP) in the past and also received regulatory clearances for IPOs. Those plans, however, failed to materialize amid a prolonged slowdown in the residential sector, a liquidity crisis and, finally, the pandemic-led disruption. Macrotech’s move, as well as rallying stock markets and a gradual recovery in home-buying sentiment, may have prompted developers to approach public markets again.
Shriram Properties, which received approval from market regulator Securities and Exchange Board of India (Sebi) for an IPO in 2019, is planning to refile its draft share sale documents in March. The firm had in 2018-19 intended to raise ₹1,250 crore through the IPO, which it cut to ₹750 crore last year.
“Given the overall optimism in the market, Shriram could raise above ₹750 crore and will take a call in the next two weeks. It expects to get a clearance sooner, given that there will only be certain tweaks in the earlier DRHP,” one of the people cited above said, requesting not to be named.
Shriram Properties, which focuses on affordable and mid-income housing projects, saw sales recover to pre-covid levels in the December quarter. The company has lined up multiple project launches this year across Bengaluru and Chennai.
Puranik Builders filed a DRHP in 2019-end for an estimated ₹900 crore IPO. The company received approval from Sebi early last year, which is valid till 31 March.
“The firm has a valid card till March-end and is evaluating if it should launch the IPO by then, and if that doesn’t happen, then file a DRHP again soon after. Last year, due to covid, Puranik couldn’t go ahead and launch the IPO; but now things look better,” the second person said.
Spokespersons at Shriram Properties and Puranik Builders declined to comment.
Mumbai-based Macrotech Developers intends to raise ₹2,500 crore through its IPO, of which around ₹1,500 crore will be used to repay debt, while it also intends to purchase either land or land development rights worth ₹375 crore with the IPO proceeds.
“This is like a window of opportunity for some developers who have been wanting to do an IPO for a while now. Raising capital for residential projects has been difficult, given the challenges the housing sector has faced and with NBFCs (non-banking financial companies) being wary of lending. Even if a couple of IPOs take off, it will be a great confidence booster for the overall sector,” said a Mumbai-based analyst, who didn’t want to be named.