Arkade Developers IPO: Should You Invest, All Details Here

Arkade Developers IPO opened for bidding today and investors will be able to place their bids till September 19. Priced between the range of Rs 121-Rs 128 a share, investors are allowed to bid for a minimum 110 shares with the option to bid for its multiple shares thereafter.

How are the investors bifurcated?

Shares worth Rs 205 crore have been allocated towards qualified institutional buyers (QIBs), while non-institutional investors (NIIs) have been apportioned 15% shares. About 35% of the net offer has been reserved for retail investors.

How will Arkade Developers utilise the raised capital?

Arkade Developers is set to raise Rs 410 crore by issuing 3.30 crore fresh equity shares. The funds will be used towards developing ongoing projects and general corporate purposes. Previously, the company amassed nearly Rs 122.40 crore from 9 anchor investors by issuing 95,62,500 shares for Rs 128 apiece.

What do Arkade Developers do?

Established in 1986, Arkade Developers focuses on developing residential luxury properties in Mumbai. Their business is into redeveloping existing residential buildings and constructing residential buildings on land acquired by the companies.

Undertaken Project Details?

The company has launched 1,220 residential buildings out of which, it sold 1,045 between 2017 to 2024. As of Q1FY25,the company has developed 2.20 million square feet of residential properties.

How has the company performed recently?

The company posted a net profit of Rs 122.81 crore for FY24. For fiscal year 2022-23, it reported a net income of Rs 50.77 crore with a revenue of Rs 224.01 crore.

How have the analysts rated the IPO?

1. SBI Securities

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"The issue appears to be attractively priced given the excellent execution track record, healthy market share in the identified micro-markets, strong balance sheet and the growth potential of the real estate industry in the MMR. The funds raised through the IPO will be utilised for acquiring land parcels which will further boost the development pipeline,” said SBI Securities.

2. StoxBox

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The realtor plans to make inroads in the eastern region of Mumbai Metropolitan Region (MMR) with a mix of commercial and residential development, said StoxBox. It added: "The current issue is priced at a P/E ratio of 15.8 times based on FY24 earnings, which is relatively lower compared to its peers."

3. Arihant Capital Markets

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The growing demand for real estate in MMR buoyed by rapid urbanisation, strategically positions Arkade Developers. It added: "Financial growth is expected to be fueled by its upcoming projects, a strategic focus on developments in Mumbai's eastern suburbs, and its blended business model. On a post-issue basis, the company trades 14.46x EV/EBITDA (FY24). We have a 'subscribe' rating for the issue."

4.Canara Bank Securities

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Reiterating about Arkade’s high-margin new projects and stable redevelopment activities, Canara Bank Securities ensured of the company’s sustained profitability and growth potential. It added: “As the offer is only for fresh issuance of shares, the IPO proceeds will be utilised only for funding business growth. This issue is available at P/EPS of 15.84 times as on FY2024, which appears less than peers. We recommend 'subscribe' this issue for long-term gains."