Signature Global to launch IPO on September 20
Real estate developer Signature Global (India) will launch its initial public offering (IPO) on September 20 to raise Rs 730 crore. The price band will be announced in the coming days.
The IPO will consist of fresh shares worth Rs 603 crore from the company and an offer-for-sale (OFS) of Rs 127 crore from the International Finance Corporation (IFC).
The offer will close on September 22. The issue size has been reduced from Rs 1,000 crore in July last year.
Signature Global is the largest real estate development company in the National Capital Region of Delhi (Delhi NCR) in the affordable and lower mid-segment housing. The company has sold 27,965 residential and commercial units, all within the Delhi NCR region.
The company plans to use the net proceeds from the IPO to repay debts amounting to Rs 432 crore, while the rest will be used for inorganic growth through land acquisitions and general corporate purposes.
Up to 75 percent of the issue size has been reserved for qualified institutional buyers (QIB), and up to 60 percent of it is reserved for anchor investors who can book shares on September 18. The remaining 15 percent of the issue size is reserved for high net-worth individuals and 10 percent for retail investors.
The IPO is being managed by ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company. Link Intime India is the registrar to the offer.
Key details of the IPO:
- Issue size: Rs 730 crore
- Fresh issue: Rs 603 crore
- Offer-for-sale: Rs 127 crore
- Price band: To be announced
- Opening date: September 20
- Closing date: September 22
- Lead merchant bankers: ICICI Securities, Axis Capital, and Kotak Mahindra Capital Company
- Registrar to the offer: Link Intime India
Risk factors to consider:
- The company has a history of losses. It recorded a consolidated net loss of Rs 63.7 crore for the year ended March FY23.
- The company is highly leveraged. Its debt-equity ratio stood at 2.34 as of March FY23.
- The real estate sector is cyclical and subject to regulatory changes.
Conclusion:
Signature Global is a leading real estate developer in the Delhi NCR region. The company has a strong track record of sales and execution. However, investors should be aware of the risks associated with the IPO, such as the company’s history of losses and its high debt levels.
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