Arkade Developers is a prominent real estate development company focusing on premium residential properties in Mumbai, Maharashtra, India's commercial capital. The company’s IPO, a Book Built Issue amounting to ₹410.00 Crores, consists entirely of a Fresh Issue of 320.37 Lakh Shares. The IPO opens for subscription on September 16, 2024, and will close on September 19, 2024. Allotment is anticipated to be finalized by Monday, September 23, 2024, with shares expected to be listed on the BSE and NSE on or about Tuesday, September 24, 2024.

The share price band for the Arkade Developers IPO is set between ₹121 to ₹128 per equity share. The minimum lot size is 110 shares, requiring a minimum investment of ₹14,080 for retail investors. For High-Net-Worth Individuals (HNIs), the minimum investment is 15 lots (1,650 shares), amounting to ₹211,200.

Subscription Status and Anchor Investors

As of September 16, 2024, the Arkade Developers IPO has been oversubscribed by 10.80 times, with bids received for 25,68,35,810 shares against the offered 2,37,75,719 shares. This high subscription rate indicates strong market interest and investor confidence in the IPO.

The company has also raised ₹122.4 Crore from Anchor Investors at the upper end of the price band, ₹128 per share. The allocation to Anchor Investors includes 9,562,500 equity shares, highlighting significant institutional backing.

Grey Market Premium (GMP)

The Grey Market Premium for Arkade Developers Limited IPO is reported to be between ₹70 to ₹75, reflecting potential listing gains of approximately 55% - 60%. While the GMP offers a preliminary gauge of investor sentiment, it is important to note that actual trading and price discovery will only occur once the shares are officially listed.

Objectives of the IPO

Proceeds from the Fresh Issue will be utilized for:

Funding a portion of the costs for ongoing projects such as Arkade Nest, Prachi CHSL, and C-Unit.

Acquisition of new land for future real estate developments and general corporate purposes.

Financial Performance and Valuation

Arkade Developers has demonstrated impressive financial performance, with revenue for Fiscal 2024 reaching ₹6,357.12 million, compared to ₹2,240.13 million in Fiscal 2023 and ₹2,371.82 million in Fiscal 2022. The company's EBITDA for Fiscal 2024 is ₹1,693.75 million, and the Profit after Tax stands at ₹1,228.08 million.

For this IPO, the company is offering shares with a pre-issue EPS of ₹8.08 and a post-issue EPS of ₹6.60. The pre-issue P/E ratio is 15.84x, while the post-issue P/E ratio is 19.39x, against the industry P/E ratio of 76.44x. The company’s ROCE and ROE for FY24 are strong at 47.34% and 46.90%, respectively.

Investment Recommendation

Given the robust subscription rate, significant GMP, and solid financial metrics, the Arkade Developers IPO appears to be a promising investment opportunity. The high demand and positive market sentiment suggest potential listing gains, making it an attractive option for both short-term investors looking for listing gains and long-term investors seeking growth in the real estate sector.

For further updates on similar issues and investment opportunities, explore the Best IPO to Apply Now - IPO List 2024, Latest IPO, Upcoming IPO, Recent IPO News, Live IPO GMP Today - Finance Saathi and stay informed with the Top News Headlines - Share Market News, Latest IPO News, Business News, Economy News- Finance Saathi.

Join our Trading with CA Abhay Telegram Channel for stock market trading insights and the Finance Saathi Telegram Channel for regular updates on share markets and IPOs.

Start your stock market journey by opening a free demat account with Choice Broking FinX.