The initial public offering (IPO) of Lodha Group’s Macrotech Developers has been subscribed 35 percent on April 8 (Thursday), the second day of bidding. The company plans to raise Rs 2,500 crore through its public issue which will close on April 9.

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The offer has received bids for 1.26 crore equity shares so far as against the offer size of 3.64 crore equity shares, as per the subscription data available on exchanges.

The portion set aside for retail investors has been booked 25 percent, while that of qualified institutional buyers has been subscribed 65 percent. Non-institutional investors have put in bids for 19 percent of the reserved portion and employees’ portion is booked 10 percent on day 2.

The company reduced the offer size to 3.64 crore equity shares from 5.16 crore after it raised Rs 741 crore from anchor investors on April 6.

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Lodha Group's Macrotech Developers to launch IPO on April 7; check issue size, price band, other key details

Macrotech Developers is amongst the largest real estate developers in India by residential sales value for fiscal 2014 to 2020. As of December 31, 2020, it has completed approximately 77.2 million square feet of developable area across 91 projects. It has 54 ongoing and planned projects having approximately 73.8 million square feet of developable area.

Brokerages are divided on the issue as some advised subscribing the offer on attractive valuations compared to its listed peers, while others flagged risks of COVID-19 to the real estate sector and the company’s huge debt.

Also Read: Macrotech Developers IPO opens today; should you subscribe?

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 the 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.”

First Published:Apr 8, 2021 1:23 PM IST