Arkade Developers, a renowned real estate company based in Mumbai, is all set to debut its ₹410 crore IPO. The IPO comprises a fresh issue of 320.37 lakh shares, and the subscription period is open from September 16, 2024, to September 19, 2024. Investors can apply for this public offering with a price band set at ₹121 to ₹128 per share.

The company focuses on developing premium aspirational lifestyle residential premises, primarily in Mumbai, one of India’s most lucrative real estate markets. Arkade Developers has built a strong brand in the real estate sector, leveraging its lineage and extensive experience in the industry. Amit Mangilal Jain, the promoter of Arkade Developers, belongs to a family that has been involved in real estate development since 1986.

The Grey Market Premium (GMP) of the Arkade Developers IPO is projected to range between ₹80 to ₹85, signifying potential listing gains of 70-75%. However, it’s important to remember that GMP is highly speculative and should not be the only basis for making investment decisions.

Subscription Status and Anchor Investors

As of 12:41 PM on September 19, 2024, the Arkade Developers IPO had been oversubscribed 42.65 times. The high subscription rate reflects significant investor interest, particularly from qualified institutional buyers (QIBs) and non-institutional investors (NIIs).

The company has raised ₹122.4 crore from Anchor Investors at the upper price band of ₹128 per share. A total of 9,562,500 equity shares were allocated to the anchor investors, which are deducted from the QIB reservation portion.

Minimum Investment Requirements

Retail investors can apply for the minimum lot size of 110 shares, amounting to an investment of ₹14,080 at the upper price band. High-Net-Worth Individuals (HNIs) need to invest a minimum of 15 lots (1,650 shares), which totals ₹211,200.

The tentative listing date for Arkade Developers shares is September 24, 2024, with listings on both BSE and NSE.

Financial Performance

Arkade Developers has demonstrated impressive financial growth in recent years. Revenue has surged from ₹2,371.82 million in FY22 to ₹6,357.12 million in FY24, with a compound annual growth rate (CAGR) of 66.51%.

Their EBITDA for FY24 stood at ₹1,693.75 million, reflecting substantial growth compared to previous years. The company’s profit after tax (PAT) has also grown significantly, from ₹508.44 million in FY22 to ₹1,228.08 million in FY24.

For the IPO, Arkade Developers is offering shares at a pre-issue EPS of ₹8.08 and a post-issue EPS of ₹6.60. The pre-issue price-to-earnings (P/E) ratio is 15.84x, while the post-issue P/E ratio is 19.39x. This compares favorably with the industry P/E ratio of 76.44x, indicating that the IPO is fairly priced and offers good value to investors.

The company’s ROCE (Return on Capital Employed) for FY24 is 47.34%, and ROE (Return on Equity) stands at 46.90%, further cementing its strong financial foundation.

Use of IPO Proceeds

The proceeds from the fresh issue will be used for the following purposes:

₹2,500.00 million will be allocated towards funding development expenses for ongoing projects like Arkade Nest, Prachi CHSL, and C-Unit.

A portion will be used for land acquisitions and general corporate purposes.

This strategy ensures that Arkade Developers can continue to grow its portfolio and deliver premium residential projects across Mumbai.

How to Check Arkade Developers IPO Allotment Status

The allotment for the Arkade Developers IPO will be finalized on Monday, September 20, 2024. Investors can check the allotment status by visiting the Bigshare Services Private Limited website or other financial portals. Here’s a quick guide:

Go to the IPO allotment status page on the registrar’s website.

Select Arkade Developers Limited IPO from the dropdown list.

Enter your application number, PAN, or DP Client ID.

Submit the details to check the allotment status.

By following these steps, you can quickly determine if you have been allotted shares in this promising IPO.

Should You Invest?

Given Arkade Developers' solid financial performance and a competitive valuation in comparison to its peers, the IPO seems like a promising opportunity for both listing gains and long-term investments. The GMP indicates potential for strong returns, and the company's growth trajectory further supports its investment appeal.

However, it's important to consider your own risk tolerance and financial situation before investing. While the real estate sector has its ups and downs, Arkade Developers' focus on premium residential projects in Mumbai gives it a unique edge in a highly competitive market.

Conclusion:

The Arkade Developers IPO presents a significant opportunity for investors looking to tap into Mumbai’s thriving real estate market. With strong financial growth, a solid GMP, and an experienced management team, this IPO could offer both short-term listing gains and long-term value.

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