Macrotech Developers makes weak market debut, lists at 10% discount

Macrotech's IPO got decent subscription as the issue was subscribed 1.36 times

Shares of Macrotech Developers (MDL) made a weak debut on the bourses, on Monday, with stock listing at Rs 439, a 10 per cent discount from its issue price of Rs 486 per share. The stock listed at Rs 436 on the National Stock Exchange (NSE).  Post listing, the stock hit a high of Rs 463.70 and a low of Rs 421 on the BSE.

At 10:04 am, MDL was trading at Rs 450.80, up 3 per cent from its opening level and 7 per cent down against issue price on the BSE. A combined 1.4 million equity shares have changed hands on the counter on the NSE and BSE, so far.

The initial public offering (IPO) of Macrotech Developers got decent subscription as the issue was subscribed 1.36 times. The issue received bids for 49.4 million shares as against 36.4 million shares on offer. The qualified institutional buyers (QIBs) category was subscribed 3.05 times. The non-institutional investor’s category was subscribed 1.44 times. The retail portion saw tepid response, with 40 per cent subscription.

Incorporated in 1995, Macrotech Developers [formerly known as Lodha Developers] is the largest real estate developer in India. The company is primarily engaged in affordable residential real estate developments and in 2019; it entered into the development of logistics and industrial parks and also develop commercial real estate. The company generates maximum revenue from this segment as in the fiscal 2020, the revenue from this segment accounted for 57.77 per cent.

Under the logistic and industrial park portfolio, it has planned to develop an industrial park of over 800 acres of land near Palava. However, the commercial real estate portfolio includes projects like corporate offices, IT campuses, and boutique office spaces. As on Dec 31 2020, the firm has successfully completed 91 projects comprising 77.22 million sq. ft. of developable area, with 59.13 million sq. ft. in the affordable housing segment.

MDL has a diversified portfolio of residential developments, spread across price points and micro-markets in the MMR, catering to a wide spectrum of economic and demographic segments, from luxury residences in South Mumbai to large, integrated townships in the extended suburbs offering affordable homes. The key risk and concerns are substantial amount of debt, the reported a restated loss in 9MFY21; may incur losses in future and spread of Covid-19 may affect MDL’s operations in near future, ICICI Securities said in IPO note.