Keystone Realtors lists at 3% premium; surges 5% post debut

Shares of Rustomjee Group firm Keystone Realtors made a lackluster debut on the stock exchanges on Thursday, with the share price listing at ₹555 apiece on the BSE and the NSE, up 2.6% against the issue price of ₹541. Post listing, the share price of the Mumbai-based realty firm gained as much as 5% to ₹568.25 on the BSE, while the market capitalisation increased to ₹6,373.72 crore. On the NSE, the stock hit a high of ₹569.95, up 5.35% against the initial public offering (IPO) price.

The muted listing of Keystone Realtors was in line with market expectations as the ₹635 crore IPO of the real estate developer received a tepid response from investors. The IPO, which includes ₹560 crore of fresh issues and ₹75 crore through an offer for sale by promoters and existing shareholders, was subscribed just 2.01 times. The issue, having a price band of ₹514-₹541, opened for subscription between November 14-16. The lot size was 27 shares, which means a retai investor could apply for up to 13 lots (351 shares or ₹189,891).

The issue received a good response from qualified institutional buyers (QIB) and high networth individuals (HNIs), while it failed to impress retail investors. As per the exchange data, the quota reserved for QIB was booked 3.84 times, while the portion allotted to HNIs was subscribed 3.03 times. The public issue was subscribed just 0.53 times in the retail category.

Keystone Realtors, a known real estate developer in Mumbai, intends to use IPO proceeds from the fresh issue of equity shares for repayment, in full or part, of certain borrowings availed by the company and its subsidiaries. A part of the raised capital will also be used for funding the acquisition of future real estate projects and general corporate purposes.

Ahead of the IPO, Keystone Realtor raised ₹190.49 crore from anchor investors by allotting 35,21,255 shares at ₹541 per share to 16 anchor investors. The anchor book that participated in the pre-IPO investment includes foreign entities such as Abu Dhabi Investment Authority, Morgan Stanley, and Saint Capital, who contributed to about 35% of the investor portion. Among domestic players, Tata Mutual Fund, Aditya Birla Mutual Fund, IDFC Mutual Fund, and Quant Mutual Fund also participated in the issue.

Formed in 1995, Keystone Realtors Limited is primarily involved in the business of real estate construction, development, and other related activities in India. As of June 30, 2022, the company had completed 32 projects, while 12 projects are in the ongoing process. Besides, it has 21 forthcoming projects across the Mumbai Metropolitan Region, all under the Rustomjee brand.

Keystone Realtors is the 32nd company to make its debut on the domestic exchanges this year. Earlier this week, speciality marine chemical manufacturer Archean Chemical Industries, electronics manufacturing company Kaynes Technology India, and Inox Green Energy Services, O&M service provider for wind projects, listed on the BSE and the NSE on November 21, November 22, and November 23, respectively.