As the primary market remains buoyant amid a bullish mood in the stock market, another IPO by a Rustomjee Group company is set to open on Monday. Here are the key facts to note about the IPO before the issue opens to take an investment call:
Issue details: The Rs 635-issue comprises fresh issue of Rs 560 crore as well as offer for sale (OFS) of Rs 75 crore. The issue will open on November 13 and will conclude on November 16.
Price band: Keystone Realtors has fixed their band in the range of Rs 514-541 apiece.
Anchor investor participation: Through the anchor book, Keystone Realtors on November 11 garnered a total of Rs 190.5 crore. The realty developer said it has decided the allocation of 35.21 lakh equity shares to anchor investors at Rs 541 per share.
About the company: Incorporated in 1995, Keystone Realtors is one of the prominent real estate developers that is engaged primarily in the business of real estate construction, development and other related activities in India.
Category allocation: The company has decided to allocate 50% shares to the qualified institutional bidders (QIBs), whereas 15% shares will be allocated to non-institutional buyers (NIIs). Remaining 35% shares will be allocated to retail bidders.Retail investors can make a bid for a minimum of 27 equity shares and then its multiples thereof.
Issue objectives: The net proceeds from the issue will be utilized towards repayment or prepayment of certain borrowings availed by the company and/or its subsidiaries, funding acquisition of future real estate projects and general corporate purposes.
Financials: In FY22, the company had reported a revenue of Rs 1,269.3 crore against Rs 848.7 crore in FY21. Profit in the last financial year stood at Rs 135.8 crore. In the June 2022 quarter, it reported a profit of Rs 4.22 crore with a revenue at Rs 168.5 crore.
Book running lead managers and registrar:
and Credit Suisse Securities (India) are the book running lead managers to the issue, whereas Link Intime India has been appointed as the registrar to the issue.
Keystone Developers share allotment and listing timeline: The listing of the shares shall be finalised on November 21, while the shares of the realty major will make its debut on the bourses on November 24.
What brokerages said
“Based on the FY22 earnings, the company is valued at 82x P/E, 38x EV/EBITDA and 5x EV/Sales. The company is IoT solutions enabled with end-to-end capabilities across the ESDM spectrum. The company aims to implement comprehensive backward integration measures by manufacturing in-house components and get into deep competencies in design of integrated circuits and chip sets. In view of strong financials, diversified business model, long-standing relationships with marquee customers, global certifications, strong supply chain and sourcing networks, we recommend ‘Subscribe’ to the issue,” said
Securities in its review of the issue.
Choice Broking, on the other hand, has accorded a subscribe with caution rating to the issue. The broking firm said, “at higher price band, KRL is demanding an EV/TTM pre-sales multiple of 2.6x, which seems to be a discount to peer average. Thus the issue seems to be attractively priced. However, considering its 76.6% sequential fall in pre-sales business (compared to 3% average increase in the peer’s business).
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