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Rustomjee IPO Details

Rustomjee Limited IPO
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Keystone Realtors Limited is one of the prominent real estate developers (in terms of absorption in number of units) in the micro markets that it is present in (Source: Anarock Report). The company commands a market share of 28% in Khar, 23% market in Juhu, 11% in Bandra East, 14% in Virar, 3% in Thane and 5% in Bhandup in terms of absorption (in units) from 2017 to 2021 (Source: Anarock Report). As of March 31, 2022, it had 32 Completed Projects, 12 Ongoing Projects and 19 forthcoming Projects across the Mumbai Metropolitan Region (“MMR”) that include a comprehensive range of projects under the affordable, mid and mass, aspirational, premium and super premium categories, all under its Rustomjee brand.

Objects of the Offer :

The offer comprises of fresh issue and an offer for sale. The fresh issue is of ₹7,000 mn out of which ₹ 4,270 mn would be used for repayment/ prepayment, in full or part, of certain borrowings availed by the company and/or certain of its Subsidiaries. The balance would be used for general corporate purposes. The offer for sale amounts to ₹ 1,500 mn and the company won’t be receiving any proceeds from it.

Rustomjee ltd IPO ANALYSIS

Consistent track record of financial performance:

The company has seen significant decrease in its revenue in FY21, decreasing from ₹21,169.89 mn in FY19 to ₹8,487.21 mn in FY21. The company’s adjusted EBITDA has decreased from ₹3,282.54mn in FY19 to ₹1,494.50 mn in FY21. Its profits have increased from ₹1,377.43 mn in FY19 to ₹2,318.23 mn in FY21.


(`₹ in Millions) FY19 FY20 FY21
Revenue from Operations 21,169.89 12,114.71 8,487.21
Adjusted EBITDA 3,282.54 1,934.26 1,494.50
Adjusted EBITDA Margin 15.51% 15.97% 17.61%
PAT 1,377.43 144.94 2,318.23
RoNW 25.18% 5.14% 38.77%
EPS 15.25 2.20 31.04
Shareholding (%) Pre IPO
Public 96.71%
Non-Promoter and Non-Public Group 3.29%
Share Reservation Net Issue (%)
QIB 50
NII 15
Retail 35
Company Leadership
Boman Rustom Irani Chairman and Managing Director
Harsh Chandra Chief Executive Officer & Projects Head
Sajal Gupta Chief Financial Officer
Issue Managers
BRLMs Axis Capital, Credit Suisse Securities
Registrar Link Intime India Private Limited

Competitive Strength:

Well established customer-centric brand in the Mumbai Metropolitan Region

Keystone Realtors Limited is one of the prominent real estate developers (in terms of absorption in number of units) in the micro markets that it is present in, namely Juhu, Bandra East, Khar, Bhandup, Virar and Thane (Source: Anarock Report), and can garner premium pricing in the MMR micro-markets where its projects are located. As of March 31, 2022, the company had 32 Completed Projects, 12 Ongoing Projects and 19 Forthcoming Projects across the MMR that include a comprehensive range of projects under the affordable, mid and mass, aspirational, premium, and super premium categories, all under its Rustomjee brand. Its presence in the MMR market for two and half decades, together with its construction quality, execution and delivery capabilities, has enabled it to establish the Rustomjee brand in the MMR. The strength of its brand is attributable to its ability to understand customer preferences and inspire customer confidence. The company’s ability to identify and capitalize on emerging trends in real estate enabled it to establish its prominence in several micro-markets in the MMR (Source: Anarock Report).

Amongst the leading residential real estate development company with a well-diversified portfolio

Keystone Realtors Limited is one of the prominent real estate developers (in terms of absorption in number of units) in the micro markets that it is present in, namely Juhu, Bandra East, Khar, Bhandup, Virar and Thane (Source: Anarock Report). It has a diversified suite of projects across a wide range of price points, and a presence in several micro markets. It has an experience in developing lifestyle projects, high value standalone buildings, gated communities and fully integrated townships, re-developments and stalled projects. The company is one of the prominent real estate developers in the redevelopment segment in terms of supply (in terms of number of units) in the micro markets that it is present in, wherein it commands a market share of 39% in Khar, 14% in Bandra East and 14% in Juhu, from the overall redevelopment and supply between 2017 and 2021 (Source: Anarock Report). Its diversified portfolio has allowed it to hedge its revenue pipelines and shield against business fluctuations across categories.

Asset-light and scalable model resulting in profitability

As part of its business model, Keystone Realtors Limited focuses on entering into joint development agreements and re-development agreements with landowners or developers or societies, which requires lower upfront capital expenditure compared to direct acquisition of land parcels. It identifies land for development or re-development based on a detailed feasibility study for the relevant project, including factors such as location, price, purpose and design impediments. The company has maintained its low capital investment through two key approaches. First, its business model allows the company to optimize the upfront capital expenditure compared to direct acquisition of land parcels as such projects do not require it to incur cost for acquisition of land other than certain refundable deposits and approval costs. Second, it adopts a disciplined approach and abides by the ceilings of permissible capital commitments for each project.

Demonstrated project execution capabilities with in-house functional expertise

Keystone Realtors Limited has adopted an integrated real estate development model, with capabilities and in-house resources to execute projects from initiation to completion. It has developed in-house competencies for every stage of the property development life cycle, commencing from business development, which involves identification of land parcels and conceptualization of the development, land acquisition, approvals, to execution, comprising planning, designing and overseeing the construction activities, marketing and sales, and property delivery. It relies on the domain knowledge, experience and functional expertise of its in-house experts to deliver quality projects in compliance with regulations. The company leverages its strong brand and reputation, development track record, industry knowledge and know-how of the regulatory environment in the MMR, and expertise in designing amenities, to deliver projects that meet the demands of its customers.

Technology focused operations resulting in operational efficiency

Keystone Realtors Limited leverages technology as an enabler in various aspects of its operations, including project planning and execution, and customer relationship management. The company focuses on implementing digitisation measures to reduce delivery timelines, providing real-time financial accounting, increasing its efficiency in vendor management and reducing wastage and reworks. The company uses 3-dimensional BIM software for model-based construction to maximise productivity and cost estimation across all its projects. It has also implemented SAP enterprise resource management (“ERP”) to assist with data management, analysis and forecasting, resulting in performance efficiency. The company has designed and implemented virtual reality and digital experience centres for project walk-throughs resulting in an immersive experience for potential customers.

Strong focus on sustainable development

The company’s projects focus on luxury while being environmentally sustainable. Keystone Realtors Limited assesses the environmental impact of its projects and has adopted a comprehensive approach to sustainable development from an early design phase, through the construction period. Its in-house architecture and design team work closely with its construction and execution team to create a comfortable living space for its inhabitants. Its smart designs are also aimed to be energy efficient. The company uses low volatile organic compounds such as iodised windows and sustainable materials.It has also implemented waste water management systems to minimise water usage for flushing, gardening and other common uses, in the layout of the project and all the schools the company has built. They have a fully-functional and operational rain water harvesting system.


  • Boman Rustom Irani (Chairman and Managing Director):He holds a bachelor’s degree in engineering from M.H. Saboo Siddik College of Engineering. He is also the president of Confederation of Real Estate Developers' Associations of India (CREDAI). He has over 26 years of experience in real estate industry.

  • Harsh Chandra (Chief Executive Officer & Projects Head):He holds a bachelor’s degree in arts from University of Delhi and post graduate diploma in forestry management from Indian Institute of Forest Management, Bhopal. He has been associated with thecompany since 2016.

  • Sajal Gupta (Chief Financial Officer):He holds a bachelor’s degree in commerce from Maharshi Dayanand University. He is also member of the Institute of Chartered Accountants of India. Prior to joining the Company, he was associated with AMW Motors Limited and OTIS Elevator Company (India) Limited.


  • Its business and profitability are significantly dependent on the performance of the real estate market generally in India and particularly in the Mumbai Metropolitan Region (“MMR”). Varying market conditions in the MMR may affect its ability to ensure sale of its projects

  • The business and growth plan could be adversely affected by the incidence and change in the rate of property taxes and stamp duties.

  • Its joint development agreements do not convey any interest in the immovable property to the company and only the development right is transferred to it.

  • The COVID-19 pandemic adversely impacted its business operations and financial performance, and it may be similarly impacted in the future.

  • The company has entered into joint development agreements, joint venture arrangements and redevelopment agreements with third parties to acquire land development rights or redevelopment rights which may entail certain risks.

  • * For complete list of risk factors kindly refer to the Draft Red Herring Prospectus.


  • The company’s inability to complete its Ongoing Projects and Forthcoming Projects by their respective expected completion dates or at all could have a material adverse effect on its business.

  • Shortage of land for development in the MMR or a significant increase in cost of such land or transferable development rights available for development in the MMR may adversely impact its business prospects.

  • The business is capital intensive and requires significant expenditure for real estate project development and is therefore dependent on the availability of real estate financing, which may not be available on terms acceptable to the company.


  • With the change in family dynamics towards a nuclear set-up more households are getting added and hence consumption is increasing, which in turn fuels the demand for housing.

  • With consumers favoring branded developers in Extended Western Suburbs, they have an edge over other developers in terms of pricing as well as sales. Branded developers in Extended Western Suburbs usually command a premium of 10% - 20% over micro-market average capital price, on account of brand trust, better amenities, and quality, among buyers


  • Significant increases in prices, including that relating to increase in taxes and levies, or shortage of or delay or disruption in supply of construction materials could adversely affect its estimated construction cost and timelines and result in cost overruns.

  • If it is not able to sell its project inventories in a timely manner, it may adversely affect its business.

  • Its financing agreements impose certain restrictions on its operations, and its failure to comply with operational and financial covenants may adversely affect its reputation, business and financial condition.

Strategies going forward:

Leverage the ‘Rustomjee’ brand to grow its asset-light operations

Keystone Realtors Limited intends to leverage its strength and experience in redevelopment and focuses on such opportunities in Mumbai’s city centre locations and major suburbs, and continues to expand its business by following a disciplined approach with an asset-light model. There are a sizeable number of old and dilapidated housing societies that create opportunities for society re-development. It plans to leverage its strength and experience in stakeholder management to take on more redevelopment projects in select parts of Mumbai based on its internal criteria. The company will also continue to identify stalled projects and collaborate with the Slum Rehabilitation Authority and developers as a last mile partner to undertake multiple developments and reduce project risks associated with land development.

Improve operational efficiency with technological innovation

Having nurtured the brand through sustained delivery, quality of construction and scaling up of operations, Keystone Realtors Limited intends to continue to enhance its capability to deliver more projects, reduce development time and cost, and achieve economies of scale. The company intends to implement additional technology initiatives across all aspects of its operations to improve efficiency in project execution, reduce project development time and cost, and increase sales. It will continue to focus on developing mechanized and technological construction capabilities to increase the efficiency and quality of its projects. Keystone Realtors Limited intends to monitor its projects using software and online tools, which it believes will enable it to reduce project timelines, ensure quality, reduce maintenance expenses, and allocate resources in a timely manner. It also proposes to undertake data analytics to identify trends and evaluate customer preferences and demand for particular types of projects and amenities within such projects.

Leverage its leadership position in the premium category to grow its presence in the mid and aspirational category

Through consistent demonstration of building upscale projects, Keystone Realtors Limited plans on leveraging its brand equity generated from its ‘Rustomjee’ brand, customer centricity and high-end product design, along with its quality execution, to maintain its market position in the markets it is present in and focus on re-development projects for the premium category. Due to its established track record in premium and super premium categories, the company has witnessed strong response to its recent launches in mid income category as well. It is essential to leverage its long track record and image as one of the leading real estate organization in MMR for significant headroom for growth in the mid income category where its presence presently is comparatively limited. As the company continues to explore opportunities for new townships and gated communities in the mid and mass, and aspirational categories, it will expand its presence in commercial development projects bolstering the amenities and facilities of its residential portfolio.

Increased focus on key growth areas in the proximity of upcoming infrastructure projects

Keystone Realtors Limited intends to increase its focus on several key growth areas such as the Western Suburbs and Navi Mumbai, by focusing on increased demand for real estate arising from upcoming transportation infrastructure projects and the relaxation of Coastal Regulation Zone norms that allow for development of more sea-facing properties. Several infrastructure projects are underway in Greater Mumbai and MMR to achieve long-term sustainability and increase the carrying capacity of the city’s transportation networks and thus improve traffic and transportation capacity and quality (Source: Anarock Report). The company plans to focus on micro-markets across MMR with proximity to these upcoming infrastructures. It has been and will continue to also evaluate cost efficient and asset light opportunities in other fast-growing markets.

Focus on sustainability

Keystone Realtors Limited endeavors to incorporate environmental-friendly elements as part of its future development projects. For instance, during the construction phase, the company intends to rely on solar photovoltaic panels to generate electricity from solar energy to support project construction, and implement more energy-saving dimmable motion-sensing lights to reduce the energy expended for illumination. It also hopes to rely on grid solar photovoltaic panels and solar heaters for common lighting areas and water heaters, respectively, as well as segregate wet and dry waste and install organic waste converters for wet waste treatment and enhance the sewage treatment technology and harvest rainwater to produce more treated water for irrigation of landscape and flushing purpose. It aspires to obtain LEED certifications by the Indian Green Building Council for its forthcoming projects.

Disclaimer -

The content on this page is made available on the basis of the DRHP (draft red herring prospectus ) filed by Keystone Realtors Limited. The final content could change based on the Red Herring Prospectus (RHP) filed

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