Macrotech Developers IPO Subscribed 0.35 Times On Day 2
A vehicle travels near the entrance of the World Towers residential project, developed by Macrotech Developers Ltd., in Mumbai. (Photographer: Kanishka Sonthalia/Bloomberg)

Macrotech Developers IPO Subscribed 0.35 Times On Day 2

Macrotech Developers Ltd. continued to witness a lukewarm response to its initial public offering on the second day of bidding.

The Mumbai-based real estate developer’s issue was subscribed 0.35 times as of 5 p.m. on April 8 led by qualified institutional buyers, according to exchange data. The IPO will close on April 9.

Subscription Details:

  • QIBs: 0.66 times.

  • Non-institutional investors: 0.19 times.

  • Retail investors: 0.25 times.

  • Employees: 0.10 times.

This is the third attempt by Macrotech (erstwhile Lodha Developers Ltd.) to launch its IPO after its first two attempts—in 2009 and 2018—failed following the global financial crisis and the IL&FS collapse, respectively.

The developer plans to raise Rs 2,500 crore through the IPO which comprises a fresh issue of 5.14 crore shares at Rs 483-486 apiece. It will use the proceeds to repay debt worth Rs 1,500 crore and acquire land and development rights worth Rs 375 crore, and use the rest for general corporate purposes.

As on December 2020, the company had consolidated borrowing of Rs 18,662 crore, including secured borrowings of Rs 18,496 crore and unsecured borrowings of Rs 165 crore. Borrowings worth Rs 16,145 crore are coming up for repayment or refinance within the next one year. Its total current liabilities stood at Rs 32,860 crore as on December.

Further, the company’s sales and gross collections from residential projects and commercial projects have declined due to disruption caused by Covid-19. In the nine months ended December, it reported a loss of Rs 270 crore.

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