 "Arkade Developers IPO GMP zooms 62% on opening day; should you subscribe?")
Arkade Developers IPO GMP opens today: The unlisted shares of Arkade Developers are commanding a strong premium in the grey market as their initial public offering (IPO) opens for subscription today. According to several sources tracking grey market activities, shares of Arkade Developers were trading at a premium of Rs 80, which translates to a GMP of 62.5 per cent against the upper end of the IPO price of Rs 128, underscoring the company's strong market appeal.
With the IPO, the company seeks to raise Rs 410.00 crores by offering an entirely fresh issue of 32,031,250 equity shares. Arkade Developers announced that it has already raised Rs 122.40 crore from anchor investors on the bidding concluded on Friday, September 13, 2024.
The IPO is available at a price band of Rs 121-128, and a lot size of 110 shares. Accordingly, investors can bid for a minimum of 110 shares and in multiples thereof. The minimum amount required by a retail investor to bid for the public issue is Rs 14,080.
From the proceeds of the IPO, Arkade Developers proposes to utilise Rs 250 crore for funding development expenses and approximately Rs 143.5 crore for funding the acquisition of yet-to-be-identified land for real estate projects. Residual proceeds will be used for general corporate purposes.
Bigshare Services is the registrar for the Arkade Developers IPO, while Unistone Capital is the book running lead manager of the public issue. The three-day subscription window to bid for the Arkade Developers IPO closes on Thursday, September 19, 2024. Following the basis of allotment of Bigshare Services shares on Friday, September 20, 2024, the company's shares will be credited into demat accounts on Monday, September 23, 2024. Shares of Arkade Developers are likely to debut on the bourses on Tuesday, September 24, 2024, and will list on the BSE and NSE.
Arkade Developers IPO review
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Should you subscribe to the Arkade Developers IPO?
Deven Choksey Research: Subscribe
Analysts at Deven Choksey Research remain bullish on Arkade Developers IPO and have assigned a subscribe rating to the public issue for investors. The brokerage firm highlighted that the company has achieved a robust 66 per cent CAGR in revenue from FY22 to FY24, with Ebitda, and PAT CAGR of 75 per cent and 55 per cent, respectively, during the same period, reflecting its operational efficiency. According to the analysts, its ROE and ROCE stand at an impressive 47 per cent, showcasing strong returns, supported by efficient project management and execution capabilities.
Choice - Subscribe
Brokerage firm Choice has assigned a Subscribe rating to the public issue of Arkade Developers. According to Choice, at the higher end of the price range, ADL is asking for an EV/Sales ratio of 3.2x, which is at a discount compared to its peers. Historically, the company has concentrated on the western suburbs of MMR, but in recent years, ADL has expanded into the eastern suburbs of Mumbai. The brokerage believes that this business growth strategy, along with its near debt-free status and consistent on-time project delivery, positions ADL for sustainable growth in the future.
About Arkade Developers (ADL)
Arkade Developers is a real estate development company concentrating on the development of premium aspirational lifestyle residential premises in Mumbai. Focused on the mid-premium segment, the company employs an asset-light model, collaborating through joint ventures to deliver high-quality residential spaces.