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Anand Rathi Report
Arkade Developers Ltd. launched its initial public offering today and the offer closes for subscription on Sept. 19. The Mumbai-based real estate developer has fixed the price band in the range of Rs 121-128 per share with a face value of Rs 10 each for the issue.
The Rs 410 crore IPO comprises completely of a fresh issue of 32,031,250 shares. The minimum lot size for retail investors is 110 shares.
Objects of the fresh issue
Funding the costs to be incurred in developing the ongoing Projects.
Funding acquisition of land for future real estate projects.
General corporate purposes.
Valuation and outlook
Arkade Developers, a prominent player in Mumbai is a rapidly expanding real estate development company. The company is focused on mid-tier residential realty projects on both new and redevelopment segments in suburban Mumbai MMR region.
Despite being in the capital intensive sector the company has very limited long-term borrowings since its projects are financed through internal accruals and promoter equity.
Given these factors the company’s exposure to a niche realty segment is well positioned against the most expensive real estate markets.
On the valuation front, at the upper price band, For FY24 Arkade is seeking PE of 19.3 times and P/BV 3.2 with market capitalization of 23760 million post-issue which seems the issue fairly priced.
Therefore, considering business growth visibility and stable financial performance the company is well placed to tap in rising Mumbai’s real estate sector we recommend a “Subscribe for Long Term” to the IPO.
Click on the attachment to read the full IPO report:
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