Macrotech Developers IPO Subscribed 1.36 Times On Final Day Of Issue

Macrotech Developers share sale via initial public offering (IPO) was subscribed 1.36 times on the third and final day of the issue, according to subscription data on the exchanges. Formerly known as Lodha Developers, the company's IPO was subscribed 0.35 times on the second day of the issue yesterday - April 8. The portion reserved for retail investors (RII) in the IPO was subscribed 0.40 times on April 9 by 5:00 pm.  The portion reserved for non-institutional investors (NII) in the IPO was subscribed 1.44 times, while the portion reserved for qualified institutional buyers (QIBs) was subscribed the highest out of the three - 3.05 times. (Also Read: Macrotech Developers IPO Subscribed 35% By End Of Second Day )

Through the initial public offer, Macrotech Developers is planning to raise Rs 2,500 crore and is sold shares in the price band of Rs 483-486 per share. The company's IPO market lot size is 30 shares. and a retail-individual investor could apply for up to 13 lots, specifically 390 shares or Rs 189,540.

The shares are likely to be listed on the stock exchanges BSE and NSE on April 22, 2021. Investors could bid for a minimum of one lot comprising 30 shares. This translates into the minimum application size of Rs 14,580 per lot at the higher end of the price band.

Macrotech Developers is the largest real estate developer in the country. Incorporated in 1995, the firm is majorly involved in affordable residential real estate developments. In 2019, the company entered in development of industrial parks, logistics, and commercial real estate.  The company hold strong sales distribution network in the country and in overseas markets such as US, UK, Singapore.

"Macrotech Developers has reported losses over the last nine months, and hence, it has a negative P/E ratio in terms of 9MFY21 data. That said, the company is valued at a PE ratio of ~29.16 times based on FY20 data. The issue seems to be expensively priced, as compared to peers.

The company's financial performance has taken a hit over the last two years. Further, real-estate business have been severely impacted following Covid-19 related disruptions. This has also hurt investor sentiment in the space. 

Even though the company ranks better as compared to peers in terms of margins and return ratios, Macrotech is burdened by very high debt. Given its huge issue size, Macrotech IPO is unlikely to see huge listing gains. Given factors such as weak outlook (due to Covid-19 disruptions), lackluster financial performance, high debt, and expensive valuations, we remain neutral on the prospects of the issue,'' INDmoney said in a report.