Macrotech Developers Ltd, formerly known as Lodha Developers, filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India to raise Rs2,500 crore via an initial public offering (IPO).
The company proposes to utilise an estimated Rs1,500 crore from the net proceeds towards prepayment, repayment, or redemption of all or a portion of certain borrowings of the company and its subsidiaries.
As of December 2020, the aggregate outstanding borrowings of the company, on a consolidated basis, was Rs18,662.19 crore.
“(This) will help reduce our outstanding indebtedness, assist us in maintaining a favourable debt-equity ratio, and enable utilisation of some additional amount from our internal accruals for further investment in business growth and expansion. In addition, we believe that as our debt-equity ratio will improve significantly, it will enable us to raise further resources at competitive rates in future to fund potential business development opportunities and plans to expand our business in the future,” the company said in its DRHP.
The company also intends to acquire land or land development rights primarily in the Mumbai metropolitan region and Pune worth Rs375 crore from part of the proceeds of the issue.
As of December 2020, the company has 91 completed projects of approximately 77.22 million square feet of developable area, of which 59.13 million square feet is in affordable and mid-income housing, 12.15 million square feet is in premium and luxury housing, 5.21 million square feet is in office space, and 0.74 million square feet is in retail space. It also has 36 ongoing projects of approximately 28.78 million square feet of developable area.
For the period ended December 2020, it’s total income was Rs3,160.49 crore versus Rs9,357.35 crore a year ago. Net loss for the period stood at Rs264.30 crore from a profit of Rs503.08 crore last year in the same period. Adjusted earnings before interest, tax, depriciation, and amortization (Ebitda) was Rs767.50 crore against Rs2,414.27 crore last year in the same period. Ebitda margin fell to 26.30% from 32.4% a year ago.
This would be the developer’s third attempt at an IPO. It filed its first share sale documents in September 2009 to raise around ₹2,800 crore but shelved its plan in the aftermath of the 2008 global crisis. Lodha later revived its plan to do a public listing in 2018 to raise around Rs5,500 crore after receiving the market regulator’s approval but withdrew it after a liquidity crisis hit the real estate sector.