Lodha Group Looks To Pare Debt By Rs 1,500 Crore In Its Third IPO Attempt

Macrotech Developers Ltd. plans to launch an initial public offering again after two failed attempts as the company looks to pare debt.

Previously known as Lodha Developers, Macrotech filed a draft red herring prospectus with the Securities and Exchange Board of India to raise up to Rs 2,500 crore in its maiden offer.

Given the regulatory requirement of a minimum 10% stake sale in an IPO, the planned mop-up will give Macrotech a market capitalisation of Rs 25,000 crore. If the developer has to sell more raise that amount, its valuation will fall.

The company had abandoned two earlier attempts to go public in 2009 and 2018 citing unfavourable market conditions. The last time it planned to raise Rs 5,500 crore.

The company may look to raise Rs 500 crore via pre-IPO placement ahead of filing its red herring prospectus, it said in the DRHP. If successful, that will reduce the size of the IPO, it said.

Here's what the filing reveals about Macrotech:

Debt

In March last year, Macrotech narrowly avoided default on dollar debt. Moody's Investor Service, too, flagged refinancing risks. The developer plans to use Rs 1,500 crore from the proceeds of the IPO to cut dent and Rs 375 crore to acquire land and developmental rights.

The company's debt stood at Rs 18,662 crore at the end of December 2020, down from Rs 24,997 crore a year earlier, according to its IPO filing.

Rs 18,497.6 crore worth of debt is secured, and Rs 164.6 crore is unsecured.

Current Projects

• 35 of the 36 ongoing projects of the luxury home developer are in the Mumbai Metropolitan Region. The ongoing projects account for estimated developable area of 28.78 million square feet.

• It also has 18 planned projects with estimated developable area of 45.08 million square feet.

• As of December 2020, Macrotech had land reserves of 3,803 acres for future developments.

Financials

• The company's revenue from operations stood at Rs 12,443 crore for the year ended March 2020, up from Rs 11,907 crore a year earlier, according to its DRHP.

• Profit after tax declined by more than half to Rs 744.8.

• For the nine months ended December 2020, it reported a revenue of Rs 2,915 crore and a loss of Rs 264.3 crore.

Covid Impact

Sales and gross collections fell to Rs 3,351.3 crore and 2,893.1 crore for the nine months ended December 2020, from Rs 5,399 crore and Rs 6,285 crore a year earlier.