Kalpataru Projects International Limited (KPIL), one of India’s leading infrastructure and real estate conglomerates, is preparing to launch a ₹1,590 crore Initial Public Offering (IPO). The proceeds from the IPO will primarily be used to reduce debt and deleverage the company’s balance sheet, according to internal sources and reports.

The public issue is being seen as a key strategic move by the Mumbai-based Kalpataru Group, which has significant presence in residential real estate, power transmission, infrastructure, and EPC projects.

IPO Structure and Timing

The Kalpataru IPO is expected to be launched in the coming weeks, with a mix of fresh issue and offer for sale (OFS) components:

• Total Issue Size: ₹1,590 crore

• Fresh Issue: Around ₹800–₹850 crore (to be confirmed in DRHP)

• Offer for Sale: Promoters and existing shareholders likely to offload partial stake

• Expected IPO Window: Late June or early July 2025

• Listing Platform: BSE and NSE

The IPO will be managed by top-tier merchant bankers, and the Draft Red Herring Prospectus (DRHP) is expected to be filed with SEBI shortly, if not already done.

Strategic Purpose: Deleveraging

According to people familiar with the matter, Kalpataru aims to reduce its debt significantly using the IPO proceeds. The company's current net debt stands at over ₹3,000 crore, and the management plans to:

• Bring down net debt-to-equity ratio to below 0.5x

• Improve interest coverage ratio and credit rating profile

• Enable greater financial flexibility for upcoming projects

The deleveraging effort is part of a broader plan to reposition Kalpataru as a leaner, capital-efficient infrastructure developer, with focus on execution, delivery, and profitability.

Business Overview

Kalpataru Projects International Limited is a part of the diversified Kalpataru Group, with decades of experience in:

• Residential and commercial real estate across Mumbai, Pune, Hyderabad, and NCR

• EPC projects in power transmission, water, roads, and railways

• Urban infrastructure, including metros, smart cities, and utility services

The company has delivered over 18 million sq. ft. of real estate projects and holds a strong EPC order book exceeding ₹20,000 crore across India and overseas.

Financial Performance Snapshot

Kalpataru has shown steady growth in its infrastructure and real estate segments, with improving profitability in the past few years:

• Revenue (FY24): ₹7,840 crore

• EBITDA: ₹1,105 crore

• Net Profit (FY24): ₹495 crore

• ROE: 14.6%

• ROCE: 13.9%

• Net Debt: ₹3,070 crore

• Order Book (EPC + Real Estate): ₹21,400 crore

The company aims to leverage its EPC scale while unlocking value from core real estate assets, especially in metro cities.

Real Estate Expansion Plans

Kalpataru is also using this IPO as a catalyst for scaling its real estate footprint, especially in:

• Redevelopment projects in Mumbai suburbs

• Luxury and mid-income housing in Pune and Hyderabad

• Mixed-use townships and commercial complexes

With increased focus on cash flow management, cost control, and capital recycling, Kalpataru seeks to strengthen its brand in the premium and mid-segment housing categories.

Analyst View

Market analysts see the IPO as a positive move for Kalpataru, especially considering its strong EPC order book and legacy brand reputation.

Key positives:

• Deleveraging will boost margins and reduce interest burden

• Diversified operations across EPC and real estate reduce cyclicality

• IPO could unlock hidden value in land banks and real estate inventory

However, concerns remain over:

• High execution risk in EPC contracts

• Regulatory challenges in urban redevelopment

• Potential slowdown in real estate absorption in Tier-1 cities

Peer Comparison

Kalpataru will be benchmarked against peers like L&T, PSP Projects, KNR Constructions, and Godrej Properties. While it does not dominate any single segment, its diversified business model gives it a unique positioning in India’s infrastructure and housing market.

Conclusion

Kalpataru’s ₹1,590 crore IPO is more than just a fundraising event — it's a strategic milestone in the company’s transformation toward becoming a leaner, debt-light, and capital-efficient enterprise.

With a focus on deleveraging, enhancing execution capabilities, and unlocking value, this IPO may appeal to investors looking for long-term infrastructure and real estate exposure.

Recommendation: Watch for DRHP, pricing, and institutional participation. Strong long-term play if debt reduction and cash flow improvement materialize post-IPO.

Disclaimer:
This article is for educational and informational purposes only and does not constitute financial advice. Investment decisions should be based on individual risk tolerance and consultation with SEBI-registered advisors. Market conditions are volatile and subject to change. Neither the author nor the platform is responsible for losses arising from use of this information.

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