- Offer opens on Wednesday, September 20, 2023 and will close on Friday, September 22, 2023
- Bids can be made for a minimum of 38 Equity Shares and in multiples of 38 Equity Shares thereafter
- Healthy cash flows, robust sales prompt realtor to reduce offer size from ₹1,000 crore
- The National Capital Region-focused developer mainly sells houses in the low and mid-income range priced up to ₹90 lakh to ₹1 crore and in the affordable segment that is priced at up to ₹30 lakh
NE BUSINESS BUREAU
AHMEDABAD, SEPT 18
NCR-based real estate company Signature Global (India) Ltd. has announced to tap the capital market with a public issue of its equity shares on Wednesday, September 20, 2023 and set the price band for the issue at ₹366 to ₹385 per equity share of face value of ₹1.
The initial public offer (IPO) aggregating up to ₹730 crore comprises a fresh issue of equity shares aggregating up to ₹603 crore and an offer for sale aggregating up to ₹127 crore by the International Finance Corporation, the selling shareholder.
The real estate developer has scaled down the size of its initial public offering of shares following good cash collections from sales and its promoters deciding not to participate in the offer for sale.
The promoters have decided not to sell any shares while International Finance Corporation will sell shares worth ₹127 crore — up from the ₹125 crore proposed earlier.
“The business in itself has created good cash flows,” Founder-Chairman Pradeep Kumar Aggarwal said. In FY22, cash collections from sales of its units were over ₹1,300 crore. “This gave us the confidence to reduce the primary portion (fresh issue) of the offer,” he added.
The robust sales and the spurt in demand for homes also prompted the sponsors not to offload any stake in the IPO. “It was more of a personal decision by the sponsors not to sell or participate in the OFS,” he explained.
The National Capital Region-focused developer mainly sells houses in the low and mid-income range priced up to ₹90 lakh to ₹1 crore and in the affordable segment that is priced at up to ₹30 lakh.
SignatureGlobal (India) Ltd. is the largest real estate development company in the National Capital Region of Delhi in the affordable and lower mid segment housing in terms of units supplied (in the below ₹8 million price category) between 2020 and the three months ended March 31, 2023, with a market share of 19%.(Source: Anarock Report)
The company intends to maintain its focus on these segments while Gurugram will also be where it will restrict its operations, “in the foreseeable future.”
Pradeep Kumar Aggarwal said there was good demand in the NCR, specifically Gurugram, where there was a paucity of good quality developers. He also pointed out that supply of houses is nowhere near what it should have been. He added that in Gurugram, inventories were “flying off the shelves.” He attributed the drop in sales growth in the industry in general to a supply issue and not of demand.
The company ended FY23 with pre-sales of ₹3,430 crore — up from the ₹2,600 crore it sold year ago.
The company has an impressive pipeline of projects over the next 2-3 years. Projects of 17 million sq ft are ongoing while another 21 msf of projects are upcoming. This translated into a total land area of 600 acres for these projects.
The company has taken price increases in its projects but in keeping with the industry average, Pradeep Kumar said.
ICICI Securities Limited, Axis Capital Limited & Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the offer.
The Company’s investor base includes IFC and HDFC Capital Advisors who participated in multiple rounds of capital raise undertaken by the Company.
