Arkade Developers IPO Day 3: GMP, subscription status, review, key dates. Should you subscribe or not?

Arkade Developers IPO: Arkade Developers Ltd, a real estate firm, has completed two full subscription days with non institutional investors taking the lead, followed by retail investors. The closing date for the issue is Thursday, September 19.

Before its IPO, the company raised ₹122.40 crore from anchor investors. The company established a price range of ₹121-128 per share for its ₹410-crore IPO.

The issue's lot size is 65 equity shares and in multiples of 65 equity shares thereafter. Arkade Developers IPO has reserved 50% of the shares in the public issue for qualified institutional buyers (QIB), 15% for non-institutional Institutional Investors (NII), and 35% of the offer is reserved for retail investors. The employees have been allocated equity shares worth up to ₹2 crores, and they are being given a discount of ₹5 per share.

Arkade Developers, an expanding real estate development company, has established a strong presence in Mumbai. As of July 31, 2023, the company has successfully completed the development of 1.80 million square feet of residential property, including projects in which Arkade has a controlling interest in partnership entities.

Between 2017 and Q1 2023, the company has introduced 1,040 residential units and has sold 792 residential units in various markets within the Mumbai Metropolitan Region (MMR) in Maharashtra.

The founder of Kejriwal Research and Investment Services, Arun Kejriwal, noted that although he was not entirely familiar with Arkade Developers' operations, the company's anchor investors were promising.

Comparably, Mohit Gulati, CIO and managing partner of ITI Growth Opportunities Fund, said it is another real estate firm joining the market at its peak. It is similar to 2007.

Gulati believes that the real estate market will slow down since MMR demand has bottomed down. According to Mohit, it will be difficult for Arkade to surpass projections in the upcoming year given this pattern.

Arkade Developers IPO Subscription Status

By 11 am on day 3 on Wednesday, the initial public offer of Arkade Developer was subscribed by 19.39, as per BSE data.

The portion for retail investors received 23.56 times subscription while the quota for non-institutional investors got subscribed 34.80 times. The QIBs part is booked 0.45 times. The employee portion has been subscribed 22.95 times.

Arkade Developers IPO Review

SMIFS Ltd

Based on the brokerage's information, Arkade intends to use the Net Proceeds to pay for a portion of the identified ongoing project's total cost as well as six upcoming projects with per-unit prices ranging from ₹9.44 million to ₹62.53 million in the MMR. For comparison, Arkade's revenue for FY24, FY23, and FY22 was ₹6,357.12 million, ₹2,240.13 million, and ₹2,371.82 million, respectively.

As a solid long-term investment, the brokerage advises subscribing to the issue because of the company's presence in the most profitable real estate market in the nation, as well as its excellent valuations at issue price, favourable return ratios, and levels of debt.

GEPL Capital Private Ltd

Arkade Developers Limited, according to the brokerage, specialises in upscale residential projects in desirable areas of Mumbai, including both brand-new construction and the renovation of existing structures. The business is well known for finishing projects ahead of time. The reduction in its borrowings from ₹149 crores in FY23 to ₹69 crores in FY24 is advantageous for the firm.

Arkade has shown strong financial success, with sales growing at a 39% CAGR and PAT growing at a 34% CAGR. The company's increasing net worth highlights both its sound financial standing and exciting expansion prospects. Though presently limited to Mumbai, growth into more locations may improve margins even further. The firm has a solid track record and is well-positioned for future expansion given Mumbai's rising real estate demand. For this reason, the brokerage advises giving the issue a "Subscribe" rating.

Arkade Developers IPO details

The Arkade Developers IPO, worth ₹410 crore, includes a fresh issuance of 32,031,250 equity shares with a face value of ₹10. There is no "offer for sale" component.

There is no offer-for-sale (OFS) component to the IPO; it is a wholly new issue of equity shares valued at ₹410 crore.

The issue's proceeds will be utilised for general corporate objectives, supporting the purchase of new real estate projects, and the advancement of the business's current and future initiatives.

As the book running lead manager for the Arkade Developers IPO, Unistone Capital Pvt Ltd is in charge of it, while Bigshare Services Pvt Ltd is the registrar.

Arkade Developers IPO GMP today

Arkade Developers IPO GMP today or grey market premium is +85. This indicates Arkade Developers share price were trading at a premium of ₹85 in the grey market, according to investorgain.com.

The expected listing price of Arkade Developers' shares, based on the upper end of the IPO price band and the current premium in the grey market, is estimated to be ₹213 per share, representing a 66.41% increase from the IPO price of ₹128.

Today, the IPO GMP indicates a positive trend based on the last 12 sessions of grey market activities, suggesting a strong listing. According to analysts at investorgain.com, the GMP ranges from ₹0 to ₹86.

'Grey market premium' indicates investors' readiness to pay more than the issue price.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.