Lodha Developers' net profit rises 32% to Rs 7.9 bn due to high sales

Realty major Lodha Developers has reported a 32 per cent rise in its consolidated net profit at Rs 7.9 billion during the last fiscal on account of higher sales, especially in the affordable housing segment.

Its net profit stood at Rs 5.99 billion in the 2016-17 financial year.

Total income of the company, which plans to launch its maiden public issue soon, rose by 22 per cent to Rs 97 billion in the 2017-18 fiscal from Rs 79.57 billion in the previous year, sources said.

Lodha Developers' total income was higher than that of DLF, which posted Rs 76.64 billion income during the previous fiscal.

Despite slowdown in the housing segment, Lodha Developers' net profit and revenue during the last fiscal went up on the back of 16 per cent increase in sales bookings from India business at Rs 81 billion.

The company, which has presence in Mumbai, Pune and London property markets, had achieved sales bookings of Rs 69.50 billion during 2016-17.

"Our sales bookings stood at Rs 81 billion during last fiscal, of which Rs 35 billion were from affordable housing projects like Pallava City," Lodha Developers' MD and CEO Abhishek Lodha had said last week The company delivered 11,000 units in the last fiscal and spent Rs 42.50 billion on construction during 2017-18.

Reviving its plan to launch the initial public offer (IPO) after eight years, Lodha Developers filed the draft red herring prospectus (DRHP) in April and got market regulator Sebi's go-ahead earlier this month.

The company plans to hit the capital market with the IPO this month or early August to raise about Rs 5,500 crore. The total debt of its India business is around Rs 180 billion, which will reduce by about Rs 45 billion from the proceeds of the public issue.

Lodha's IPO, if successful, would be the second biggest IPO in the real estate sector, after DLF that raised close to Rs 92 billion in 2007.

This would be the second attempt by Lodha Developers to launch a public issue and list its shares on the stock exchanges.

The company had filed its DRHP in September 2009 to raise about Rs 28 billion. It had received Sebi's nod in January 2010, but later shelved the plan due to unfavourable market conditions post the global financial crisis.

According to the latest DRHP filed by Lodha, the company will issue fresh shares worth up to Rs 37.5 billion. The promoters will sell up to 1.8 crore shares through the offer for sale (OFS) route.

The company is also considering a pre-IPO placement of up to 95 lakh equity shares for cash consideration aggregating up to Rs 7.5 billion, the document said.

The global coordinators of the IPO are Kotak Mahindra Capital, CLSA India, JM Financial and Morgan Stanley India.

The privately-held Lodha Group, which was founded in 1995 by Mangal Prabhat Lodha, had completed projects with developable area of 50.49 million sq ft till December last year.

The company has 37 ongoing projects, of which 35 are in Mumbai region and Pune in India and two in London. These projects account for a developable area of 33.80 million sq ft, bulk of it in the Mumbai Metropolitan Region (MMR).

The group had forayed into the London realty market in 2013 and acquired two prime sites in central London for an investment of about 400 million pounds. Lodha UK is eyeing a sales revenue of 1.5 billion pounds (over Rs 120 billion) from two ongoing housing projects in central London.