Arkade Developers is into development of premium aspirational lifestyle residential premises in MMR region. Arkade Developers IPO is set to raise built issue of Rs 410.00 crores entirely as a fresh issue of 3.2 crore shares.
| IPO opens | September 16, 2024 |
| IPO Closes | September 19, 2024 |
| IPO Size (Rs.) | ₹410.00 Cr |
| Breakup | Fresh issue only |
| Face Value: | ₹ 10 |
| IPO Price in Rs : | ₹121 to ₹128 per share |
| Minimum Lot | 110 Shares |
| Listing At | NSE , BSE (mainboard) |
| QIB | ~50 % |
| NII Quota | ~15% |
| Retail Quota | ~35% |
| BRLM | Unistone |
| Registrar | Bigshare |
About Arkade Developers:
- Arkade Developers is a real estate development Company concentrating on the development of premium aspirational lifestyle residential premises in Mumbai..
- Their business can broadly be classified into 2 categories:-
- Development / construction of residential premises on land acquired by Arkade (New Projects)
- Redevelopment of existing premises (Redevelopment Projects).
- As on June 30, 2024, they have developed 2.20 msf of residential property (including through partnership entities where Arkade holds majority stake).
- Between 2017 and Q1 2024, they have launched 1,220 residential units and sold 1,045 residential units in different markets in MMR, Maharashtra.
- Arkade Group has successfully undertaken 10 redevelopment projects (from 2003 to March 2024) within the Mumbai city.
- Company’s current portfolio of Ongoing Projects includes gated communities such as Arkade Nest, Arkade Aspire, Arkade Prime and Arkade Aura.
- In the last 2 decades they have completed 28 projects, 8 projects executed by the Promoter through his proprietorship, Arkade Creations, and 9 projects through joint development arrangements with other third parties aggregating more than 4.5 msf of development and have catered to more than approximately 4,000 customers.
- As of June 30, 2024, out of 6 projects that are currently under-development 3 are New Projects and 3 are Redevelopment Projects.
Financials : Arkade Developers
| Particulars / Rs. Cr | 2024 | 2023 | 2022 |
| Revenue from Operations | 634.74 | 220.15 | 228.93 |
| Revenue Growth (%) | 188.32% | -3.84% | – |
| EBITDA | 169.38 | 68.33 | 69.97 |
| EBITDA Margin (%) | 26.68% | 31.04% | 30.56% |
| Net Profit | 122.81 | 50.77 | 50.84 |
| Net Profit (%) | 19.35% | 23.06% | 22.21% |
| Share Capital | 152 | 2 | 2 |
| Reserves | 171.4 | 198.32 | 147.5 |
| Net Worth | 323.4 | 200.32 | 149.5 |
| Total Borrowings | 69.41 | 149 | 64.41 |
| Debt to Equity | 0.21 | 0.74 | 0.43 |
| ROE (%) | 46.90% | 29.02% | 40.90% |
| ROCE (%) | 47.34% | 24.30% | 46.17% |
| NAV (₹) | 21.28 | 13.18 | 9.84 |
| Post issue Share Capital | 185.66 | ||
| FV | 10.0 | ||
| IPO price | 128.0 | ||
| EPS Fy234 | 6.6 | ||
| PE | 19.4 | ||
| Market cap in Lacs | 2,376 | ||
| Market cap / Sales | 3.74 |
Anchor: Arkade Developers IPO
Arkade Developers raised Rs 122.40 crore from 9 anchor investors.
Salient Points: Arkade Developers IPO
- There growing demand for real estate in MMR buoyed by rapid urbanisation.
- Strategic location of projects in micro-markets of MMR, Maharashtra;
- The leading player and amongst Top 10 developers in terms of supply in select micro-markets of, and an established developer in, MMR;
- From the net proceeds, Rs 250 crore will be used for funding a part of the costs to be incurred in the development of its ongoing projects, and upcoming projects. The balance amount will be used for funding acquisition of land for real estate projects and general corporate purposes.
- P/E ratio stands at ~ 19.4x.
- P/BV – 3.2 times, EV/Sales w-3.9 times.
- Listed Peers: Compares well with peers Suraj Estate, whose share price has seen good rise as well as with Keystone developers’ (Rustomjee).
- Arkade Developers raised Rs. 20 cr via private placement at Rs. 123 per share in July 2024 which seems fair.
- Company’s debt equity ratio is low at 0.3:1 and will further drop to 0.1:1 post the IPO.
- Arkade’s Developers FY24 pre-sales were healtrhy and rose 13% YoY to Rs. 617 cr.
- So far it has been mainly in western Mumbai suburbs of Vile Parle, Andheri, Goregaon, Malad, Kandivali, Borivali.
- Plans to make inroads in the eastern region of Mumbai Metropolitan Region (MMR) with a mix of commercial and residential development
- Offer is only for fresh issuance of shares, the IPO proceeds will be utilised only for funding business growth.
- I intend to apply in Arkade Developers IPO. Positives include their execution track record, healthy market share in the identified markets, strong balance sheet and good growth potential of the real estate
- GMP as reported on social media has been Rs.. 86 (67.2%).
- This post is exploratory and educational purposes only.
- Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.