Suraj Estate Developers gets SEBI approval for IPO

24 May 2022 , 11:27 AM

Mumbai-based real estate player Suraj Estate Developers has received the Securities and Exchange Board of India (SEBI) approval for its proposed initial public offering (IPO).

The company filed its papers with SEBI in the month of March for an IPO comprising fresh issue of shares aggregating to Rs 500 crore with no offer for sale component.

The issue has a face value of Rs5 per equity share for the proposed share sale. The Offer is being made through the Book Building Process, wherein at least 75% of the Offer shall be available for allocation to Qualified Institutional Buyers, not more than 15% of the Offer shall be available for allocation to Non-Institutional Bidders and not more than 10% of the Offer shall be available for allocation to Retail Individual Bidders.

The proceeds from its fresh issuance worth Rs315 crores for the repayment or prepayment of borrowings, in full or part of all or certain borrowings for the company and its subsidairy, Rs45 crore for acquisition of land or land development rights besides general corporate purposes.

Centrum Capital Limited and Anand Rathi Advisors Limited are the book running lead managers to the issue.

According to a company-commissioned Anarock report, it had launched 14 residential projects between 2016 and 2021, with 12 (86%) of them being redevelopment projects. It also has institutional clients like Saraswat Cooperative Bank Limited (Prabhadevi) and Clearing Corporation of India Limited (Dadar), for which it has constructed and sold built-to-suit corporate headquarters. 

Founded in the year 1986 by Rajan Meenathakonil Thomas, Suraj Estate Developers has been developing residential and commercial properties throughout the South Central Mumbai region. They are among the top two developers with 15.25% market share in terms of supply and rank third with 13.50% market share in terms of absorption in the residential sub-markets of Mahim, Matunga, Dadar, Prabhadevi, and Parel in South Central Mumbai region for calendar years 2016 to 2021.

The realtor through its emphasis on contemporary architecture, strong project execution capabilities, and quality construction, the real estate developers have established a strong brand and a successful track record in the real estate industry. As a result, it has a strong presence in the South Central Mumbai region, has generated significant brand recall in sub markets in this region, and substantial sales referrals from existing customers.

Its well-known brand, long-standing operations, and considerable experience has launched 14 residential projects between January 2016 and December 2021, with 12 of them (86%) being redevelopment projects.

Suraj Estate Developers clocked a profit of Rs 6.28 crore in the financial year FY21 against Rs 1.52 crore in the previous year. Revenue during the year FY21 increased significantly to Rs 239.99 crore from Rs 86.93 crore in the previous year, an increase of 176.08%, primarily due to increase in sales on account of increase in sale volume of its projects namely, Palette (Dadar) and Ocean Star (Prabhadevi) and reduction of stamp duty from 5% to 2%.

Profit for the seven-month period ended October 2021 stood at Rs11.90 crore on revenue of Rs109.62 crore.