An initial public offering (IPO) of Shriram Properties, a part of Shriram Group, has been launched today and will end on December 10. It will have a price range of ₹113-118 per share. Over Rs. 268 crores has been raised by Shriram Properties from anchor investors in advance of its IPO. Shriram Properties is part of the Shriram Group of companies, a 90,000 crore financial conglomerate with a strong presence in South India.
The company started operations in Bengaluru in 2000, and it ranks among the top five residential developers in South India in terms of the number of units it launched between 2012 and 2021 across Tier 1 cities like Bengaluru and Chennai. Besides Bengaluru and Chennai, the company also operates in Kolkata. Through the IPO, the company intends to raise Rs 600 crore through a fresh issue of Rs 250 crore and an offer for sale of Rs 350 crore worth of shares. The offer will end on December 10.
Among the participating shareholders in the offer for sale (OFS) is TPG Asia SFV Pte Ltd, WSI/WSQI V (XXXII) Mauritius, Omega TC Saber Holdings Pte Ltd, and Tata Capital Financial Services. An investor can bid for a minimum of 125 shares and then multiples thereof. The company is selling its shares between Rs 113 and Rs 118 per share.
“At the higher price band of Rs 118, Shriram Properties is demanding a price-to-book value multiple of 1.8x, which is at a significant discount to the peer average of 4.6x. We rate the issue as “subscribe,” said Choice Broking.
Shriram Properties specializes in mid-market and affordable housing but also has several luxury housing projects. The company is exploring commercial office space as well. India’s real estate development industry is fragmented but highly competitive. In South India, the company’s chief competitors are large developers such as Prestige Estates Project, Brigade Enterprises, Embassy Group, Puravankara Projects, RMZ Corp and Sobha Developers.
In September, the company had completed 29 projects, 35 were under development and 46.72 million square feet of the estimated saleable area were in the pipeline. An estimated 21.45 million square feet of saleable area is contained within its land reserves of approximately 197.47 acres.
