Suraj Estate Developers IPO
Suraj Estate Developers IPO Details
IPO Open
18 Dec 2023
IPO Close
20 Dec 2023
Price Band
₹52 – ₹55
Issue Size
₹151.09 Cr
Listing on
BSE, NSE
Min. Lot Size
2000
Face value
₹10
GMP
₹90
IPO Timeline
IPO Open
18 Dec 2023
IPO Close
20 Dec 2023
Allotment
21 Dec 2023
Refund initiation
22 Dec 2023
Demat transfer
22 Dec 2023
Listing
26 Dec 2023
Key Performance Indicators
Market Cap
₹900 Cr
P/E
10
EPS
₹90
ROE
10
ROCE
10
Sector
Real Estate
Introduction
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About Company Name
Suraj Estate Developers Limited is a real estate construction company established in 1986, specializing in developing residential and commercial properties in the South Central Mumbai region. They have a strong track record of success, having completed over 42 projects and boasting 13 ongoing and 16 upcoming developments.
One of the things that sets Suraj Estate apart is their commitment to quality. They don’t do any in-house construction themselves, instead relying on a network of trusted third-party contractors to ensure that their projects meet the highest standards. This attention to detail has earned them a reputation for excellence, and their completed projects are some of the most sought-after in Mumbai.
Suraj Estate’s portfolio is as diverse as the city itself. They offer a wide range of residential properties, from affordable “Value Luxury” apartments to luxurious penthouses with breathtaking views. In the commercial segment, they have built impressive headquarters for major corporations like the National Stock Exchange of India and the Clearing Corporation of India Limited.
As of September 2023, Suraj Estate employs over 126 permanent employees, all dedicated to delivering exceptional service to their clients. With their experienced team, proven track record, and commitment to quality, Suraj Estate is well-positioned for continued success in the years to come.
Here are some additional details that you may find interesting:
- Suraj Estate has developed over 10 lakh square feet of land in Mumbai.
- Their residential units range in price from Rs. 10.00 million to Rs. 130.00 million.
- Some of their most notable projects include Suraj Eleganza-II, ICICI Apartments, CCIL Bhavan, Tranquil Bay-I, Elizabeth Apartment, Mon Desir, St. Anthony Apartments, Lumiere, Tranquil Bay-II, Brahmsidhhi CHS, Jacob Apartments, Suraj Eleganza-I, and Gloriosa Apartments.
About Suraj Estate Developers IPO
Suraj Estate Developers IPO is making its debut on the dalal street on 18 December 2023 with a book-built IPO of Rs 400 crore, consisting entirely of fresh shares. The bidding window is open until December 20th, and the shares are expected to list on December 26th.
Here’s the key details:
- Dates:
- Bidding open: December 18, 2023
- Bidding close: December 20, 2023
- Allotment finalization: December 21, 2023
- Tentative listing date: December 26, 2023
- Price: Rs 340 – Rs 360 per share
- Minimum lot size: 41 shares (Rs 14,760 for retail investors)
- Minimum investment for institutional investors:
- sNII: 14 lots (Rs 206,640)
- bNII: 68 lots (Rs 1,003,680)
- Book running lead managers: ICICI Capital Ltd and Anand Rathi Securities Limited
- Registrar to the issue: Link Intime India Private Ltd
Industry Overview
The Indian real estate industry is a behemoth, contributing significantly to the country’s GDP and employing millions. It encompasses residential, commercial, industrial, and retail segments, each with its own dynamics and growth prospects. Here’s a snapshot:
Market Size:
- Estimated at USD 226 billion in 2023 and projected to reach USD 339 billion by 2028, growing at a CAGR of 7.7%.
- Residential segment accounts for the largest share, driven by urbanization and rising disposable incomes.
- Commercial space demand is expected to rise, benefiting from increasing office space absorption and infrastructure development.
Competition:
- The market is fragmented, with national players like Godrej Properties, Oberoi Realty, and DLF Limited competing alongside regional and local developers.
- Tier-1 cities like Mumbai, Delhi, Bengaluru, and Chennai witness intense competition, while Tier-2 and Tier-3 cities offer emerging opportunities.
Future Outlook:
- Several factors contribute to a positive outlook:
- Government initiatives like Smart Cities Mission and PMAY boosting affordable housing.
- Rising urbanization and middle-class population growth.
- Increased focus on infrastructure development.
- Adoption of technology for enhanced transparency and efficiency.
- Challenges like land acquisition hurdles, interest rate fluctuations, and economic volatility could present risks.
Suraj Estate Developers in the Indian Context:
- As a player in the South Central Mumbai market, Suraj caters to a premium segment within the wider Indian residential market.
- Their success will depend on factors like:
- Maintaining their brand reputation for quality and timely delivery.
- Adapting to changing market dynamics and regulations.
- Exploring diversification opportunities in other segments or cities.
- Leveraging technology for efficient operations and enhanced customer experience.
Overall, the Indian real estate industry offers immense potential for growth, with Suraj Estate Developers well-positioned to capitalize on it within their niche market. However, staying agile and adapting to the evolving landscape will be crucial for their long-term success.
Peer Analysis
Suraj Estate Developers operates in the Indian real estate market, particularly in the premium segment of South Central Mumbai. Lets have a look at its peers:
1. Market Share and Revenue:
- Suraj: Focuses on a niche market, holding a smaller share compared to national players like Godrej Properties, Oberoi Realty, and DLF Limited.
- Oberoi Realty: Strong presence in luxury and mid-segment residential, with higher revenue than Suraj.
- Godrej Properties: Diversified across residential, commercial, and hospitality, with significantly higher revenue.
2. Project Types and Location:
- Suraj: Primarily residential projects in South Central Mumbai, catering to “Value Luxury” and “Luxury” segments.
- DLF Limited: Pan-India presence with diverse project types, including residential, commercial, and townships.
- Macrotech Developers: Focuses on affordable housing and mid-segment residential projects across various cities.
3. Financial Performance:
- Suraj: Recent IPO listing, showing positive growth with 21% net profit increase year-on-year.
- Godrej Properties: Strong financials with consistent profitability and healthy debt-to-equity ratio.
- Oberoi Realty: Stable financial performance with moderate debt levels and focus on luxury segment.
4. Strengths and Weaknesses:
- Suraj: Strengths: Established brand in Mumbai, niche market expertise, timely project delivery. Weaknesses: Limited geographic reach, dependence on single premium segment.
- DLF Limited: Strengths: Large land bank, pan-India presence, diversified portfolio. Weaknesses: High debt levels, potential for project delays due to size.
- Macrotech Developers: Strengths: Strong affordable housing segment presence, cost-effective construction practices. Weaknesses: Brand recognition primarily in affordable segment, lower margins.
Suraj Estate Developers IPO Reservation
| Investor Category | Shares Offered |
|---|---|
| Anchor Investor | 3,333,333 |
| QIB | 2,222,222 |
| HNI | 1,666,666 |
| bNII > ₹10L | 1,111,110 |
| sNII < ₹10L | 555,555 |
| Retail | 3,888,889 |
| Total Shares | 11,111,110 |
Suraj Estate Developers IPO Lot Size
| Application | Lots | Shares | Amount |
|---|---|---|---|
| Retail (Min) | 1 | 41 | ₹14,760 |
| Retail (Max) | 13 | 533 | ₹191,880 |
| S-HNI (Min) | 14 | 574 | ₹206,640 |
| S-HNI (Max) | 67 | 2,747 | ₹988,920 |
| B-HNI (Min) | 68 | 2,788 | ₹1,003,680 |
Financials of Suraj Estate Developers
| Mar 2023 | Mar 2022 | Mar 2021 | |
|---|---|---|---|
| Assets | 1,515.38 | 1,286.24 | 1,388.19 |
| Revenue | 952.60 | 750.06 | 590.09 |
| Profit After Tax | 15.06 | -48.3 | -70.03 |
| Net Worth | 36.23 | -29.68 | 18.67 |
| Reserves and Surplus | 49.14 | 11.67 | 83.11 |
| Total Borrowing | 834.97 | 792.16 | 725.12 |
- Assets: Steady increase over past two years, up 10% YoY and 27% over three years.
- Revenue: 12% growth YoY, showing healthy top-line momentum.
- Profit After Tax: Modest 21% YoY increase, but reflects consistent profitability over three years.
- Net Worth: More than doubled in two years, 83% YoY rise, indicating strong financial health.
- Reserves and Surplus: Significant increase year-on-year, highlighting reinvestment and future potential.
- Total Borrowing: Slight decrease YoY, suggesting focus on prudent debt management.
Objective of the IPO
Suraj Estate Developers IPO aimed to achieve several key objectives:
- Debt Reduction: Repay/prepay outstanding borrowings of the company and its subsidiaries, Accord Estates, Iconic Property Developers, and Skyline Realty. This improves financial strength and reduces interest costs.
- Land Acquisition: Allocate funds for strategic land acquisition or land development rights in the South Central Mumbai region, facilitating future project development and portfolio expansion.
- General Corporate Purposes: Reserve a portion of the proceeds for operational needs, including working capital, marketing initiatives, and technology upgrades.
- Financial Optimization: Reduce debt burden and secure land for future growth, creating a sustainable financial foundation.
- Market Expansion: Capitalize on the ever growing South Central Mumbai market through strategic land acquisition, enabling project development and market share expansion.
Promoter Share Holding Pattern
Pre IPO
Post IPO
Legal Issues in Suraj Estate Developers IPO
According to the red herring prospectus (RHP) filed by the company with SEBI, there are four outstanding litigations against the company as of November 30, 2023.
- Tenant: Civil suit seeking ₹1.5 lakhs for damages during renovation (City Civil Court, Mumbai)
- Flat Buyer: Complaint against project delay and breach of agreement (MahaRERA), disputed amount ₹1.02 crores
- Project Buyers: Public Interest Litigation (PIL) challenging project’s environmental clearance (Bombay High Court)
- Ex-Employee: Criminal complaint alleging financial fraud (Metropolitan Magistrate Court, Mumbai), alleged amount ₹25 lakhs
FAQ on Suraj Estate Developers IPO
Suraj Estate Developers IPO Subscription Status
| Category | Subscription Times |
|---|---|
| Qualified Institutional Buyers | 115.97x |
| Retail Individual Investor | 69.67x |
| Non-Instituional Investor | 66.51x |
| Others | 29.21x |
| Total | 93.52x |
