Keystone Realtors IPO opened for public subscription on Monday and will close on Wednesday, 16 November. The Mumbai-based real estate developer which sells properties under the brand ‘Rustomjee’ has fixed the IPO price band at Rs 514-541 per share. Ahead of the IPO, the company collected over Rs 190 crore from anchor investors ahead of its issue. The realtor is looking to raise Rs 635 crore through the initial share sale, which consists of a fresh issue of equity shares aggregating up to Rs 560 crore and an Offer-For-Sale (OFS) worth Rs 75 crore by promoters. The equity shares of the company are expected to be listed on stock exchanges BSE and NSE 24 November 2022.
Issue break-up
QIB portion – 50%Non-institutional portion: 15%Retail portion: 35%
The IPO has a lot size of 27 shares. A retail-individual investor can apply for up to 13 lots or 351 shares worth Rs 1,89,891. Axis Capital Ltd. and Credit Suisse Securities (India) Pvt. are the book-running lead managers for the issue, while Link Intime India Pvt. Ltd. is the registrar. Keystone Realtors intends to utilise the net proceeds towards funding the repayment, and prepayment of borrowings to the tune of Rs 341.6 crore as well as towards funding the acquisition of future real estate projects and general corporate purposes, according to the RHP.
Should you subscribe to Keystone Realtors IPO?
Choice Broking: Subscribe with caution
“At higher price band, KRL is demanding an EV/TTM pre-sales multiple of 2.6x, which seems to be discount to peer average. Thus the issue seems to be attractively priced. However considering its 76.6% sequential fall in pre-sales business (compared to 3% average increase in the peer’s business), we assign a “Subscribe with Caution” rating for the issue.”
Reliance Securities: Subscribe
“While the company had been inconsistent with its top and bottom lines for the past few years, we believe that the uptick in the real estate sector and softening of inflationary pressure augured well for Keystone. In the view leading position in Mumbai Real estate market, strong pipeline of ~35mn sq. ft. of saleable area, strong track record with decent financials, and attractive valuation, we recommend ‘SUBSCRIBE’ to the issue.”
Hem Securities: Long-term subscribe
“Company’s asset-light and scalable model resulting in profitability and stable financial performance along with demonstrated project execution capabilities with in-house functional expertise has robust stakeholder management capabilities across the spectrum of project development; Hence, looking after all above, we recommend “Long Term Subscribe” on issue.”
KRChoksey Shares and Securities: Subscribe
“On the margins front, the company has ample scope for expansion as the current margins include few one-off expenses, which impacted the margins. Thus, the management is confident to deliver competitive margins in the coming years. Keystone has reported a growth of 61.7 per cent CAGR over FY20-22 in pre-sales. Keystone, under its brand name Rustomjee is a strong player; the company will benefit from the opportunities available supported by its joint partners.”
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Founded in 1995, Keystone Realtors is one of the prominent real estate developers. As of March 31, 2022, they had 32 completed projects, 12 ongoing projects and 19 forthcoming Projects across the Mumbai Metropolitan Region (MMR), that includes a comprehensive range of projects under the affordable, mid and mass, aspirational, premium and super premium categories, all under their Rustomjee brand.
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
