Arkade Developers Limited IPO Date, GMP, Review 2024

Arkade Developers is launching its IPO as a book-built issue valued at ₹410 crore. This IPO consists entirely of a fresh issue of 3.2 crore shares. The subscription period for Arkade Developers’ IPO will commence on September 16, 2024, and will close on September 19, 2024.

The allotment is expected to be finalized on Friday, September 20, 2024, with the shares set to list on both BSE and NSE. The tentative listing date is scheduled for Tuesday, September 24, 2024.

The price band for Arkade Developers IPO is fixed between ₹121 and ₹128 per share. Retail investors must apply for a minimum lot size of 110 shares, requiring a minimum investment of ₹14,080. For small non-institutional investors (sNII), the minimum lot size is 15 lots, equivalent to 1,650 shares, requiring an investment of ₹211,200. Large non-institutional investors (bNII) must apply for a minimum of 72 lots, equivalent to 7,920 shares, amounting to ₹1,013,760.

About Arkade Developoer Limited

Arkade Developers Limited has established itself as a notable player in Mumbai’s real estate sector, focusing on the development of new projects and the redevelopment of existing premises.

The company’s track record is impressive, having developed 1.80 million square feet of residential property as of July 31, 2023. This achievement underscores Arkade’s capability to execute projects efficiently in one of India’s most competitive real estate markets.

Offer Details

The IPO structure for Arkade Developers Limited is as follows:

• Fresh Issue: The company is offering a fresh issue of equity shares worth up to ₹4,300.00 million.
• Pre-IPO Placement: There’s a possibility of a pre-IPO placement of up to ₹200.00 million before filing the Red Herring Prospectus.
• Employee Reservation: An employee reservation portion is included, although the exact number of equity shares and the amount are yet to be disclosed.
• Post-Issue Capital: The issue will constitute a certain percentage of the post-issue paid-up equity share capital, with the exact figure to be determined.

Arkade Developer Financial Performance

Arkade Developers Limited’s financial performance demonstrates its strong position in the market:

• Revenue from operations in Fiscal 2023: ₹2,201.52 million
• Profit after tax in Fiscal 2023: ₹506.61 million
• Net Worth as of March 31, 2023: ₹2,002.11 million
• Total Borrowings as of March 31, 2023: ₹1,489.95 million

These figures indicate a healthy revenue stream and profitability, which could be attractive to potential investors.

Business Overview

Arkade Developers Limited has carved out a niche in Mumbai’s real estate market:

• Focus: The company specializes in developing premium aspirational lifestyle residential premises in Mumbai.
• Track Record: Between 2017 and Q1 2023, Arkade launched 1,040 residential units and successfully sold 792 units across various markets in the Mumbai Metropolitan Region (MMR).
• Market Presence: The company’s concentration in Mumbai, one of India’s most lucrative real estate markets, positions it well for future growth.

Risks

As with any investment, there are several risks associated with Arkade Developers Limited:

1. Project Identification: The company may face challenges in identifying suitable redevelopment projects or acquiring land for new developments.
2. Project Completion: Any delays in completing projects could adversely affect the company’s business and reputation.
3. Penalty Clauses: Agreements with customers include penalty clauses for project delays, which could impact profitability.
4. Third-Party Reliance: The company depends on third-party contractors for construction, exposing it to potential delays or quality issues.
5. Competitive Industry: Operating in a highly competitive market could lead to reduced market share or lower operating margins.

Use of Proceeds

The net proceeds from the IPO are earmarked for specific purposes:

1. Development Expenses: ₹2,700.00 million will be allocated to fund ongoing and future development projects.
2. Land Acquisition and General Corporate Purposes: The remaining amount will be used for acquiring land for future real estate projects and for general corporate purposes. The exact allocation for this category is yet to be disclosed.

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It’s worth noting that the amount used for general corporate purposes will not exceed 25% of the gross proceeds.

Arkade Developers Limited’s IPO presents an interesting opportunity for investors looking to gain exposure to Mumbai’s dynamic real estate market.

The company’s strong financial performance, focus on premium residential properties, and established presence in the MMR are significant positives.

However, potential investors should carefully consider the associated risks, including project execution challenges and market competition.

As the IPO process unfolds, more details are likely to emerge, providing a clearer picture of the offering’s valuation and growth prospects. Investors are advised to review the Red Herring Prospectus and consult with financial advisors before making an investment decision.

This IPO not only represents a significant milestone for Arkade Developers Limited but also reflects the ongoing vibrancy and potential of Mumbai’s real estate sector.

As urban development continues to be a key focus in India’s economic growth story, companies like Arkade are poised to play a crucial role in shaping the future of residential real estate in the country’s financial capital.