Should you be investing in the Macrotech Developers IPO?

By Angel Broking | Published on 5th April 2021 | 387

Should you be investing in the Macrotech Developers IPO?

The Macrotech Developers IPO has been the talk of recent times. Macrotech Developers is offering a Rs. 2,500 Crores Initial Public Offering (IPO) that is to be started on April 7, 2021. The public offering is planned to be kept open from April 7 to April 9. The price range that Macrotech Developers has fixed for the IPO ranging between Rs. 483 and Rs. 486 per share.

The IPO aims to raise capital to acquire land, meet corporate demands, and reduce the outstanding borrowings of the company. Before plunging into further details, let’s have a look at the company’s fundamentals and financials.

Fundamentals about Macrotech Developers

Macrotech was previously known as Lodha Developers. The company has its primary and core business in the residential housing construction field. They primarily focus on affordable housing in the mid-income housing range. The Chief Executive Officer and the Managing Director of this company, Abhishek Lodha, has maintained the legacy of this company. Over the years, the company grew into one of the largest real estate developers in the country.

In 2019, they expanded their services from mid-range housing to the development of industrial parks and logistics. They entered into a JV (joint venture) with a subsidiary of ESR Cayman called ESR Mumbai 3 Pte. Limited. As they continued to evolve and grow in the real estate business, many began comparing the services offered by Macrotech Developers with its peers like Oberoi Realty, Prestige Estates Projects, DLF, Sobha, and Sunteck Realty.

Now, Macrotech Developers is involved with the development of commercial real estate as well. They are popularly known for completing 91 projects thereby amounting to the construction of nearly 77.22 million square feet of land.

The financial health of Macrotech Developers

Assessing the financial health of a company is very important before investing. Macrotech Developers seem to have a clean slate when it comes to finances as their profits and revenue had slightly reduced between 2018 and 2019. However, the company has increased its overall revenue by March 2020. It is important to keep in mind that for almost every company across industries, the revenue decreased in the year 2020 ever since the lockdown.

So, here’s a brief overview for you to understand the financial aspect of Macrotech Developers. By March 2018, Marotech Developers reported their annual revenue to be Rs. 13,726.57 Crores with Rs, 1,789.39 as profit after tax. However, the financial year of 2019 did not favour the company as much. The company’s earnings per share were Rs.45.1. In March 2019, the company reported its annual revenue to be Rs. 11,978.87. Their profits after taxes were deducted came up to Rs. 1,643.98 Crores. The earnings per share in 2019 came down to Rs. 41.33.

As of March 2020, Macrotech Developers reported increased revenue in comparison to the previous financial year. They made a revenue of Rs. 12,560.99 Crores with Rs. 744.84 as profit after tax. The company’s earnings per share amounted to Rs. 18.46. As of 9 months ended December 31, 2020, Macrotech Developers reported their revenue of Rs. 9,357.35 Crores with Rs. 503.08 as profit after tax. Its earning per share was Rs. 15.05. With 9 months ended December 31, 2021, the revenue is expected to be Rs. 3,160.49 Crores with a profit after tax of Rs. -264.30 Crores and the earnings per share of Rs. -6.83.

How much can you bid on Macrotech Developers?

Investors can bid for a maximum quantity of 30 shares per lot. This means that the minimum application size would be Rs. 14,580 per lot. Besides, an investor can apply for a maximum of 13 lots. The Qualified Institutional Buyers (QIBs) will have nearly 50% of the net issue reserved for them. The non-institutional investors will have 15% reserved for them. Whereas, 35% of the shares will be reserved for retailers. The employees of Marotech Developers also have a certain percentage of shares reserved for them that amounts up to Rs. 30 Crores.

How to apply for Macrotech Developers IPO?

You can apply to the Macrotech Developers IPO through any of the brokers available. You can choose the number of shares you want to bid for. Then, you can process by making the payment online through your UPI or ASBA. Your allotment for bids will be announced on April 16, and your refunds would be initiated by April 19. Finally, the IPO listing will happen on April 22, 2021.

If you are yet to create a Demat account, Angel Broking is the right place for you. To know more about the IPO and get live updates, follow Angel Broking.