- Macrotech Developers Limited is one of the largest real estate developers in India by residential sales value for the past few years
- The company’s brands include “Lodha”, “CASA by Lodha”, and “Crown – Lodha Quality Homes” for affordable and mid-income housing projects. The “Lodha” and “Lodha Luxury” brands are for premium and luxury housing projects
- Lodha’s core business is residential real estate developments with a focus on affordable and mid-income housing
- In 2019, Lodha forayed into the development of logistics and industrial parks and entered into a joint venture with ESR Mumbai
- The company also develops commercial real estate in and around the core residential projects
- Macrotech Developers has completed 91 projects comprising 77.22 million square feet of Developable area as of December 31, 2020. Out of this, 59.13 million is in affordable and mid-income housing, 12.15 million in premium and luxury housing, 5.21 million is in office space and 0.74 million retail space.
Macrotech Developers Limited IPO opens for subscription between April 7 to April 9, 2021. The company operates in the real estate sector, which is going through its own set of challenges. Declining margins and thereby stressed financials and on-ground execution challenges indicate risk.
About the business
Macrotech Developers engages itself into a customer-centric model that focuses on designing and developing the “branded products”. These products address customer needs across locations and price points. The company’s core competence is to professionally manage the real estate value chain to deliver a project from conceptualization to completion.
The in-house sales team finds support from the distribution network of multiple channels across India and key non-resident Indian markets. These include the Gulf Cooperation Council, United Kingdom, Singapore and the United States.
The company commenced operations in Mumbai and expanded to the suburbs of Mumbai. Later the company diversified into other segments and regions in the Mumbai Metropolitan Region (MMR) and Pune.
Table below sets forth the details of ongoing and planned projects:
About the promoters of Macrotech Developers
The Lodha group has been in the real estate business since 1986. Mr Abhishek M. Lodha, Managing Director and Chief Executive Officer, leads the company.
Below is the condensed financial information of Macrotech Developers.
Amounts in Rs Cr excluding per share data
- There are several industry group peers, and the average P/E is 42.1x
Comparison with other industry peers
|Gross proceeds of the issue||Rs 2,500 Cr|
|Issue related expenses||To be ascertained|
|Net issue size||–|
Utilization of proceeds:
- Reduction of the aggregate outstanding borrowings (Rs 1,500 Cr)
- Acquisition of land and land development rights (Rs 375 Cr)
- General corporate expenses
The information provided in the red herring prospectus filed by the company with the Securities and Exchange Board of India (www.sebi.gov.in) is the basis for this note. However, I recommend that the reader validate the data before making any financial decision. Also, investment in an initial public offering (IPO) is subject to market risks. It should be evaluated, keeping your risk profile and investment objective in mind. The author will not be responsible for any financial loss or otherwise resulting from any action taken based on the above.
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