Sri Lotus Developers IPO Opens On July 30 — For Key Details, Valuations, Risks, Read Anand Rathi's Analysis

The Mumbai-based real estate development company Sri Lotus Developers Ltd.'s Rs 792-crore IPO comprises only of fresh issue, with no offer-for-sale component. The company has fixed the price band in the range of Rs 140 to Rs 150 per equity share of the face value of Rs 1.

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Anand Rathi Report

Sri Lotus Developers Ltd. will open its initial public offering for subscription on July 30 and the offer closes on August 1.

The Mumbai-based real estate development company has fixed the price band in the range of Rs 140 to Rs 150 per equity share of the face value of Rs 1. Investors can place bids starting from a minimum of 100 shares and in multiples thereafter.

The Rs 792-crore IPO comprises only of fresh issue, with no offer-for-sale component.

Monarch Networth Capital Ltd., Motilal Oswal Investment Advisors Ltd. are the book-running lead managers for the public issue.

The shares will be listed on both the National Stock Exchange and the BSE on Aug 06.

Objects of the Issue

• Investment in the Subsidiaries, for part-funding development and construction cost of their Ongoing Projects.

• General Corporate Purpose.

Valuation

Sri Lotus Developers and Realty Ltd. holds a strong strategic position in the Ultra Luxury and Luxury residential real estate market of Mumbai’s Western Suburbs, one of the city's most premium micro-markets. The company prioritizes customercentricity, consistently delivering quality, value, and satisfaction across its expanding portfolio of residential and commercial projects.

Their asset-light model executed through development agreements with landowners and housing societies—minimizes capital outlay, supports financial flexibility, and ensures robust operating cash flows. With integrated, end-to-end execution capabilities covering design, approvals, construction, and handover, the company is known for timely project completion.

At the upper price band company is valuing at P/E of 30.6x to its FY25 earnings, with EV/Ebitda of 24.5x and market cap of Rs 7,330.60 crore post issue of equity shares.

We believe that the IPO is fully priced and recommend a “SubscribeLong Term” rating to the IPO.

Key Risk:

• Business is dependent on the performance of, and the conditions affecting, the real estate micro markets with high geographical concentration in the Western Suburbs of Mumbai. As of June 30, 2025, all ongoing projects and most of their upcoming projects are in the Western Suburbs of Mumbai. Consequently, company is exposed to risks from economic, regulatory and other changes as well as natural disasters in the Western Suburbs of Mumbai, which in turn may affect their ability to ensure sale of projects and pricing of units in such projects.

• Inability to complete their Ongoing Projects and Upcoming Projects by their respective expected completion dates or at all could have a material adverse effect on their business, results of operations and financial condition.

• As of June 30, 2025, they have 85 unsold units in their completed projects and 167 unsold units in their Ongoing Projects. If company is not able to sell their project inventories in a timely manner, then it may adversely affect their business, results of operations and financial condition.

• It is difficult to compare their performance between periods, as their revenues from operations and expenses fluctuate significantly from period to period.

• Company is entirely dependent on third party contractors for the construction and development of their projects and their largest contractor, Shree Gajanand Associates, accounts for 21.7%, 29.9% and 28.1% of their total expenses for the Fiscal 2025, Fiscal 2024 and Fiscal 2023, respectively. Any failure on their part to perform their obligations could adversely affect their business, results of operations and financial condition.

• Increases in prices or shortage of or delay or disruption in supply of, construction materials and contract labour could adversely affect their estimated construction cost and timelines resulting in cost overruns.  Company have experienced negative cash flows in the last three fiscal years.

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