The IPO of Macrotech Developers, formerly and popularly known as Lodha Developers is open for subscription with a price band of Rs 483-486 per share. This is the company’s third attempt to go public.

Analysts have raised concerns over the company’s deteriorating financials and huge debt.

“The financials have substantially deteriorated over the last few years. It had a substantially high amount of debt relatively lower amount of revenues. Although the company’s land banks and size of its unsold portfolios are fairly large we believe the problem is the debt. This IPO is not going to reduce that amount of debt in any meaningful manner,” Deepak Shenoy, founder of Capitalmind told CNBC-TV18.

Shenoy believes Macrotech’s peers are better valued due to lower debt and prefers the likes of Godrej Properties and Oberoi Realty over Macrotech’s IPO among Mumbai real estate space.

On pricing, he said that Lodha’s Enterprise value was at Rs 42,000 crore which, according to him, was not “meaningfully expensive.”

“For next three years, they will be focusing on reducing their debt levels to a point which is sustainable. I believe others are valued better because of the lower debt and they will continue to get better valuations in the market place,” Shenoy said.

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For full interview, watch accompanying video...

(Edited by : Ankit Gohel)

First Published:Apr 8, 2021 12:54 PM IST