Signature Global IPO Subscribed 100% on Day 2
The public issue of Signature Global (India) was subscribed 100% on the second day of bidding, September 21, with bids for 1.12 crore equity shares against an offer size of 1.12 crore shares. High networth individuals (HNIs) and retail investors bid aggressively, subscribing 2.16 times and 2.12 times their respective quotas, while qualified institutional buyers (QIBs) subscribed 9% of the reserved portion.
The Delhi NCR-based affordable housing company aims to raise Rs 603 crore via fresh issue and Rs 127 crore through offer-for-sale (OFS) at the upper price band of Rs 385 per share. International Finance Corporation (IFC) is the only seller in the OFS.
Signature Global has completed several real estate projects under the Deen Dayal Jan Awas Yojana (DDJAY-APHP). There are 29 ongoing and 19 forthcoming projects over 216.57 and 379.07 acres of land respectively.
The company’s revenue is primarily concentrated in Delhi NCR, Gurugram, and Haryana regions. Any supply-demand fluctuations in the region may impact the company’s operations.
The IPO is priced at a price-to-book value (P/BV) of 101.05 based on its net asset value (NAV) of Rs 3.81. The company has posted losses for the last three fiscal years.
Key takeaways:
- Signature Global’s IPO has been well-received by investors, with bids for 100% of the shares on offer on the second day of bidding.
- The company aims to raise Rs 730 crore through the IPO, which will be used to repay debt, acquire land, and for general corporate purposes.
- Signature Global has a track record of completing affordable housing projects in the Delhi NCR region.
- The company’s revenue is concentrated in a few key regions, which could make it vulnerable to supply-demand fluctuations.
- The IPO is priced at a premium to the company’s book value, given that it has posted losses for the last three fiscals.
Recommendation
Investors should carefully consider their risk appetite and investment objectives before investing in the IPO.
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