Real estate developer Signature Global (India) has set a price band of ₹366-385 per share for its initial public offering (IPO), slated to open on September 20. The Gurugram-based affordable housing company is looking to raise ₹730 crore through public listing of shares, including ₹603 crore via the fresh issue of equity shares and offer for sale (OFS) of shares worth ₹127 crore.
The International Finance Corporation-backed company has cut IPO size from ₹1,000 crore, when it filed its draft red herring prospectus with capital market regulator SEBI in July last year. As per the DRHP, Sarvpriya Securities, a part of the company's promoter group, had proposed to sell shares worth ₹125 crore, but it has now dropped the plan.
Promoters own 78.36% shares in Signature Global and the remaining 21.64% are held by public shareholders, including IFC, HDFC Capital, DKL Broking & Infra LLP, and Credible Nivesh. The IFC, an investment arm of the World Bank Group, owns a 5.38% stake in the company, while HDFC Capital holds 3.5% shares in the realty firm.
The three-day bidding for Signature Global IPO will close on September 22, while the anchor book will open on September 18. The shares are set to be listed on stock exchanges BSE and NSE tentatively on October 4. The allotment of shares will be finalised on September 27, while successful bidders will get the shares credited into their demat accounts on October 3.
The lot size of the IPO is 38 equity shares and its multiples thereafter, which means the minimum investment amount for the application would be ₹14,630. The company has reserved up to 75% of the issue for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and remaining 10% for retail investors.
The company intends to use the capital raised from the fresh share sales to repay debts and utilise for inorganic growth through land acquisitions as well as to meet general corporate purposes. The real estate firm will use nearly two-thirds of the capital for repayment of debts, amounting to ₹432 crore. As of June 2023, the outstanding loans of the company stood at ₹495.26 crore and its four subsidiaries at ₹123.86 crore.
ICICI Securities Limited, Axis Capital Limited & Kotak Mahindra Capital Company Limited are the Book Running Lead Managers to the offer.
Signature Global (India) is the largest real estate development company in the National Capital Region of Delhi in the affordable and lower mid segment housing in terms of units supplied (in the below ₹80 lakh price category) between 2020 and the three months ended March 31, 2023, with a market share of 19%, as per Anarock report.
The company commenced operations in 2014 through its subsidiary, Signature Builders Private Limited, with the launch of Solera project on 6.13 acres of land in Gurugram, Haryana. It has grown its operations over the years and in less than a decade, and as of March 31, 2023, it had sold 27,965 residential and commercial units, all within the Delhi NCR region, with an aggregate saleable area of 18.90 million square feet.
The company claimed that one of its core strengths is the ability to efficiently turnaround projects on land that it ties-up and it typically launched projects within a period of 18 months from the date of acquisition of the land.
For the year ended on March 31, 2023, the company posted a net loss of ₹63.7 crore, while consolidated revenue from operations was at ₹1,553.6 crore. It had registered a loss of ₹115.5 crore and revenue from operations at ₹901.3 crore in the previous financial year.
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