Kalpataru Limited, a well-established and integrated real estate development company, has officially opened its Initial Public Offering (IPO) on June 24, 2025, with the subscription period running until June 26, 2025. The IPO comprises a Fresh Issue of ₹1,590.00 Crores, translating to 384.05 lakh shares, marking a significant step in the company’s growth journey in the public markets.

With more than 113 completed projects across major Indian cities such as Mumbai, Thane, Panvel, Pune, Hyderabad, Indore, Bengaluru, and Jodhpur, Kalpataru Limited is known for its footprint in luxury, premium, and mid-income residential as well as commercial and retail developments. The company has full control of the real estate development cycle, from land acquisition to design, construction, and sales, making it a comprehensive player in the sector.

IPO Structure and Financial Details

The price band for the Kalpataru Limited IPO is fixed between ₹387 to ₹414 per equity share. At the upper end of this band, the expected market capitalisation of Kalpataru will stand at ₹8,524.06 Crores. The lot size is 36 shares, making the minimum investment for retail investors ₹14,904. High-Net-Worth Individuals (HNIs) must apply for a minimum of 14 lots, i.e., 504 shares, amounting to an investment of ₹2,08,656.

The Book Running Lead Managers (BRLMs) to the issue are ICICI Securities Limited, JM Financial Limited, and Nomura Financial Advisory and Securities (India) Private Limited, while Link Intime India Private Limited acts as the registrar to the IPO.

Anchor Investor Participation

Ahead of the public opening, Kalpataru raised ₹708.34 Crores through the anchor book by allocating 1,71,09,783 equity shares at ₹414 per share. This was done in consultation with the BRLMs and signifies strong institutional interest. The anchor investors' allocation comes from the Qualified Institutional Buyers (QIBs) category.

Grey Market Premium (GMP) Analysis

Interestingly, the Grey Market Premium (GMP) for the Kalpataru IPO remains ₹0, indicating no premium or discount in the unregulated grey market. This implies a neutral sentiment among retail and unofficial traders. It is crucial to remember that GMP is unofficial, speculative, and should not be used as the sole indicator for investment decisions.

As of June 25, 2025, at 11:00 AM, the live subscription status showed the IPO being subscribed 0.13 times. This reflects a moderate early response, and investors are closely watching the upcoming days to determine momentum.

Allotment, Listing, and Timeline

The Kalpataru IPO allotment date is tentatively scheduled for June 27, 2025 (Friday). Investors will be able to check their allotment status by visiting the registrar’s website and entering their application number, PAN, or DP Client ID.

The listing of shares is expected on July 01, 2025 (Tuesday) on both BSE and NSE, subject to final regulatory approvals and processes.

Financial Performance Overview

A closer look at the financials of Kalpataru Limited reveals a mixed performance:

• Revenue from operations was ₹16,994.89 million for the period ending December 31, 2024, with full-year revenues in FY24 and FY23 at ₹20,299.36 million and ₹37,166.11 million respectively.

• EBITDA has shown variability: ₹1,513.22 million (Dec 2024), but a negative EBITDA of ₹-288.28 million in FY24, showing operational challenges.

• Profit After Tax (PAT) remained negative for the past three fiscal periods: ₹-1,165.07 million in FY24, ₹-2,294.33 million in FY23, and ₹-1,253.62 million in FY22. However, the PAT turned slightly positive at ₹55.11 million for the nine-month period ending Dec 2024.

These metrics highlight that while the company has a strong operational footprint, its profitability remains a concern.

Valuation Metrics and Analysis

The valuation indicators suggest that Kalpataru’s IPO is expensively priced:

• Pre-Issue EPS: ₹-7.41

• Post-Issue EPS: ₹-5.02

• Pre-Issue P/E Ratio: -55.87x

• Post-Issue P/E Ratio: -82.40x

• Industry P/E Ratio: 36x

• ROE for FY24: -10.15%

• RoNW: -10.15%

• Annualised EPS: ₹0.56

• Annualised P/E Ratio: 738.06x

Such a high valuation paired with negative returns on equity and continued losses suggests that the IPO is not favourably priced for retail investors.

Company Background and Leadership

Kalpataru Limited is promoted by Mr. Mofatraj P. Munot and Mr. Parag M. Munot, with industry experience of over five and three decades, respectively. Their leadership has enabled the company to complete numerous large-scale real estate projects and become a recognized name in urban development across India.

The company continues to maintain a diversified real estate portfolio and is active across multiple Indian cities, making it a regional powerhouse in real estate development.

IPO Objectives

The company plans to utilize the net proceeds from the IPO for the following purposes:

1. ₹11,925 million for repayment or pre-payment of borrowings, either fully or partially, undertaken by the company and its subsidiaries.

2. General corporate purposes, which may include working capital needs, administrative expenses, and expansion activities.

These objectives are aimed at deleveraging the balance sheet and improving financial stability.

Recommendation and Conclusion

Given the lack of Grey Market Premium, ongoing losses, high valuation, and negative return ratios, most analysts and market observers suggest that retail investors should avoid this IPO for listing gains. While Kalpataru’s long-term prospects may remain positive due to its strong operational history and leadership, the current financial indicators do not favour a short-term investment strategy.

This IPO may be more suitable for long-term investors who believe in the real estate sector’s recovery and Kalpataru’s capability to return to profitability. However, such investments should only be made after careful due diligence and consultation with financial advisors.

Final Words

The Kalpataru Limited IPO, while backed by a reputable name in the real estate sector, raises several red flags in terms of valuation, profitability, and investor sentiment. The lack of listing gain indicators further underscores the cautious tone of the market. As always, investors are encouraged to read the red herring prospectus, consider their risk appetite, and seek professional financial guidance before making any investment decisions.

Disclaimer: This content is for educational and informational purposes only. It does not constitute financial advice or an offer to buy/sell any securities. Investment in securities is subject to market risks. Please read all relevant documents carefully and consult your investment advisor before investing.

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