The much-anticipated Arkade Developers IPO is set to finalize its share allotment today, on September 20. The real estate developer, which opened its Initial Public Offering (IPO) for subscription between September 16 and September 19, has generated considerable buzz among investors. The IPO raised Rs 410 crore, a sum that is expected to be utilized for multiple development projects, acquisitions, and general corporate purposes.
With a subscription rate that surpassed expectations, Arkade Developers Ltd witnessed overwhelming demand from a variety of investor categories, including qualified institutional buyers, non-institutional investors, and retail individual investors.
Arkade Developers IPO Allotment Process and How to Check Status
The allotment of shares in the Arkade Developers IPO is a significant event for all investors who placed bids during the subscription period. Investors can confirm whether they have received shares through two primary platforms: the BSE website and the Bigshare Services portal.
To check the IPO allotment status, follow these steps:
- Visit the official BSE website at https://www.bseindia.com/investors/appli_check.aspx.
- Under ‘Issue Type’, select ‘Equity’.
- Under ‘Issue Name’, choose Arkade Developers Ltd from the drop-down menu.
- Enter your Application Number or Permanent Account Number (PAN).
- Complete the CAPTCHA by clicking on the ‘I am not a robot’ box.
- Click on ‘Search’. Your allotment status will be displayed on the screen.
Alternatively, investors can visit the Bigshare Services Pvt Ltd portal at https://ipo.bigshareonline.com/IPO_Status.html and follow similar steps to view their allotment.
Arkade Developers IPO: Key Subscription Numbers
On the final day of bidding, September 19, the Arkade Developers IPO received an astonishing 113.49 times subscription, far surpassing the 2,23,12,500 shares available for allocation. This translates into bids for 2,53,23,06,150 shares, highlighting the high demand for the real estate company’s shares.
Breaking it down by category, the non-institutional investor portion was subscribed a staggering 172.22 times, while the retail individual investor (RII) portion saw a 53.78 times subscription. Qualified institutional buyers (QIBs) were particularly enthusiastic, with their portion receiving 172.60 times the shares on offer.
The price band for the Arkade Developers IPO was set between Rs 121 and Rs 128 per share, positioning the company attractively compared to its peers.
How to Interpret the Grey Market Premium (GMP) for Arkade Developers IPO
As of today, the grey market premium (GMP) for Arkade Developers shares is Rs 60 over the issue price. This indicates a potential listing gain of 46.88% for investors who purchased shares at the upper price band.
While the GMP is a strong indicator of market sentiment, it’s crucial to remember that it fluctuates based on external factors, including market conditions and investor demand. A premium in the grey market reflects investors’ willingness to pay more than the issue price, showcasing confidence in the company’s prospects.
Analyst Recommendations on Arkade Developers IPO
Several brokerages have given positive recommendations for the Arkade Developers IPO, largely based on the company’s operational strength, strategic positioning in the Mumbai Metropolitan Region (MMR), and its strong financial track record.
Choice Broking Review
Choice Broking has given the IPO a “Subscribe” rating, citing Arkade Developers’ strong presence in premium residential properties in Mumbai. The company has completed 28 projects in the MMR region, primarily focusing on both new developments and redevelopment projects.
At the higher price band, Arkade Developers is asking for an EV/Sales ratio of 3.2x, which is at a discount compared to its peers. With a near debt-free balance sheet and consistent on-time project deliveries, the brokerage sees long-term growth potential for the company.
SBI Securities Review
SBI Securities also recommends subscribing to the IPO, stating that the company’s P/E multiple of 19.3x at the upper price band of Rs 128 makes it a compelling buy. The company’s excellent execution track record and its strong market position in the MMR make it an attractive option for investors seeking both listing gains and long-term returns.
SBI Securities particularly highlights Arkade Developers’ plan to use IPO proceeds to acquire land parcels, which will further boost its development pipeline.
Arkade Developers: Financial Performance and Future Growth
Arkade Developers Ltd has grown steadily over the years, with a focus on the Mumbai real estate market. As of July 31, 2023, the company had developed 1.80 million square feet of residential property, primarily in the western suburbs of Mumbai.
Between 2017 and Q1 2023, Arkade Developers launched 1,040 residential units and sold 792 units, demonstrating the company’s strong sales pipeline.
Revenue Growth
Arkade Developers reported revenues of Rs 224.01 crore for the fiscal year 2023, down slightly from Rs 237.18 crore in 2022 but significantly higher than its 2021 revenue of Rs 113.18 crore. This demonstrates the company’s resilience in a competitive market, with the ability to bounce back quickly from fluctuations.
Anchor Investors: Strong Backing for Arkade Developers
Ahead of the public offering, Arkade Developers secured Rs 122.40 crore from anchor investors, including BNP Paribas Financial Markets – ODI, Societe Generale-ODI, and Saint Capital Fund. The shares were issued at Rs 128 per share, reinforcing the company’s strong market position and confidence from leading institutional investors.
Arkade Developers IPO: Important Dates to Remember
For investors following the Arkade Developers IPO, here are key dates to keep in mind:
- Subscription period: September 16 to September 19, 2024
- Share allotment finalization: September 20, 2024
- IPO listing on BSE and NSE: Expected on September 24, 2024
Conclusion
The Arkade Developers IPO presents a unique opportunity for investors seeking exposure to the booming real estate market in Mumbai. With strong demand across all investor categories, the company’s attractive price band, and promising growth prospects, this IPO has garnered significant attention.
Given the company’s excellent track record in residential real estate, especially in Mumbai’s western suburbs, and its well-thought-out expansion strategy, we believe the Arkade Developers IPO is poised for a successful listing and continued growth in the future.
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