The Arkade Developers IPO kicks off today, Monday, September 16, 2024, marking a significant milestone for the real estate company. With shares priced between Rs 121 and Rs 128, this initial public offering presents a promising opportunity for investors interested in the real estate sector. The subscription window will remain open until Thursday, September 19. In this article, we’ll delve into the details of the Arkade Developers IPO, explore its potential, and provide expert opinions to help you make an informed decision.
Understanding Arkade Developers:
Who is Arkade Developers?
Arkade Developers is a prominent real estate development firm based in Mumbai, Maharashtra. Specializing in high-end, sophisticated residential projects, the company operates primarily in the Mumbai Metropolitan Region (MMR). Their business model revolves around two core activities: constructing new residential buildings on acquired land and redeveloping existing properties.
A Look at Their Financials:
The company is launching a Rs 410 crore IPO, offering 3.20 crore fresh equity shares. The funds raised will be used for ongoing project development, acquiring new land for future real estate ventures, and general corporate purposes. Notably, Arkade Developers has already secured Rs 122.40 crore from nine anchor investors, including notable names such as BNP Paribas Financial Markets and Societe Generale-ODI.
Historical Performance and Growth:
Since its inception, Arkade Developers has made substantial progress. Between 2017 and June 30, 2024, they launched 1,220 residential units and sold 1,045 of them. They have developed 2.20 million square feet of residential space as of Q1FY25. Over the past two decades, the company has completed 28 projects, reflecting a robust track record in the real estate sector.
IPO Details: Pricing and Allocation:
Pricing and Subscription Information:
The Arkade Developers IPO is priced between Rs 121 and Rs 128 per share. Investors can apply for a minimum of 110 shares, with further applications in multiples of 110. The IPO includes a reservation of Rs 2 crore worth of shares for eligible employees.
Investor Allocation:
The IPO allocation is divided as follows:
- 50% for Qualified Institutional Bidders (QIBs)
- 15% for Non-Institutional Investors (NIIs)
- 35% for Retail Investors
Listing Information:
Shares of Arkade Developers will be listed on both BSE and NSE, with the tentative listing date set for September 24, 2024. The sole book running lead manager for the IPO is Unistone Capital, and Bigshare Services will act as the registrar for the issue.
Expert Opinions: Should You Subscribe?
Choice Broking:
Rating: Subscribe
Choice Broking highlights Arkade Developers’ focus on premium residential properties and strategic operations in MMR’s western suburbs. The firm’s successful completion of 28 projects and steady growth in sales make this IPO attractive. The EV/Sales ratio of 3.2 times is considered a discount compared to peers, adding to the positive outlook.
SBI Securities:
Rating: Subscribe
SBI Securities praises the company’s execution track record, strong balance sheet, and market share. The IPO’s valuation at a FY24 P/E multiple of 19.3 times is deemed attractive given the real estate sector’s growth potential. They recommend subscribing for both listing gains and long-term investment.
StoxBox:
Rating: Subscribe
StoxBox notes Arkade Developers’ expansion plans into eastern MMR and its focus on a mix of commercial and residential developments. With a P/E ratio of 15.8 times based on FY24 earnings, the IPO is priced lower than its peers, making it a favorable medium to long-term investment.
Arihant Capital Markets:
Rating: Subscribe
Arihant Capital Markets commends Arkade Developers for its strategic positioning in the growing MMR real estate market. The company’s strong brand recognition and efficient project management contribute to its competitive edge. They recommend subscribing due to expected financial growth and strategic focus.
Marwadi Financial Services:
Rating: Subscribe
Marwadi Financial Services highlights Arkade Developers’ valuation at a P/E of 19 times based on FY24 EPS. Compared to peers trading at higher P/E ratios, Arkade’s valuation appears reasonable. They recommend subscribing, noting the company’s established position in MMR and competitive valuation.
KR Choksey Finserv:
Rating: Subscribe
KR Choksey Finserv emphasizes Arkade Developers’ robust returns on equity (ROE) and return on capital employed (ROCE), along with its efficient project execution. The company’s strong reputation and asset-light model make it a solid investment choice.
Canara Bank Securities:
Rating: Subscribe for Long Term
Canara Bank Securities appreciates Arkade Developers’ blend of high-margin new projects and stable redevelopment activities. The IPO’s P/E ratio of 15.84 times is seen as favorable compared to peers, and the company’s strategic market positioning is expected to drive long-term growth.
Final Thoughts: Is the Arkade Developers IPO Right for You?
The Arkade Developers IPO kicks off today, presenting an enticing opportunity for investors looking to tap into the growing real estate market in Mumbai. With a well-established track record, strategic expansion plans, and positive expert ratings, this IPO appears to be a promising investment. Whether you’re a retail investor or a qualified institutional bidder, this IPO offers potential for both short-term gains and long-term growth.
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