Arkade Developers Limited, a real estate development company based in Mumbai, saw its shares debut on the stock market at a 37% premium to the issue price of ₹128. Shares opened at ₹175 on the NSE and ₹175.9 on the BSE. The company, which focuses on premium lifestyle residential projects in Mumbai, attracted considerable investor interest during the IPO subscription period from September 16 to 19, 2024.

IPO Details

The Arkade Developers IPO was a ₹410 crore Book Built Issue, consisting entirely of a fresh issue of 320.37 lakh shares. The price band for the IPO was set between ₹121 and ₹128 per share, with a minimum investment of ₹14,080 for retail investors (110 shares) and ₹211,200 for HNIs (15 lots or 1,650 shares).

Grey Market Premium (GMP)

In the days leading up to the IPO, the Grey Market Premium (GMP) indicated potential listing gains of 70%-75%. However, it is essential to understand that GMP values are based on speculative trading and do not guarantee actual market performance. GMP, while informative, should not be the sole basis for investment decisions.

Financial Performance

Arkade Developers has shown consistent financial growth in recent years:

Revenue for FY2024: ₹6,357.12 million

Revenue for FY2023: ₹2,240.13 million

Revenue for FY2022: ₹2,371.82 million

The company's EBITDA in FY2024 was ₹1,693.75 million, with a Profit After Tax (PAT) of ₹1,228.08 million, reflecting its strong financial health. Arkade Developers' return on equity (ROE) for FY2024 was an impressive 46.90%, and the return on capital employed (ROCE) stood at 47.34%.

The company issued shares at a pre-issue EPS of ₹8.08 and a post-issue EPS of ₹6.60, translating to a pre-issue P/E ratio of 15.84x and a post-issue P/E ratio of 19.39x. This valuation suggests that the IPO was fairly priced, especially compared to the industry’s average P/E ratio of 76.44x.

IPO Subscription and Allotment

The Arkade Developers IPO was well-received by investors, with the issue being oversubscribed 42.65 times by the close of the subscription period. The allotment of shares was finalized on September 20, 2024. Investors can check the Arkade Developers IPO allotment status through the Bigshare Services Private Limited registrar website by following these steps:

Go to the IPO allotment status page.

Select Arkade Developers Limited IPO from the dropdown menu.

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

Submit the details to view your allotment.

Use of IPO Proceeds

Arkade Developers plans to utilize the IPO proceeds from the fresh issue for:

₹2,500 million to fund development costs for their ongoing real estate projects (Arkade Nest, Prachi CHSL, and C-Unit).

Acquisition of yet-to-be-identified land for future projects and for general corporate purposes.

Conclusion

With a strong debut and significant investor interest, Arkade Developers has positioned itself as a promising player in the real estate sector. The company’s solid financials, well-priced IPO, and focus on aspirational lifestyle residential development suggest potential for long-term growth. Given its oversubscription and GMP performance, investors may find both listing gains and long-term value in the stock.

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