Lodha Developers’ Macrotech Trading Day Strategy: Low Subscription Disappoints; sell or hold shares?

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The IPO of Macrotech, a Lodha Developers group company, was the first public issue of the new fiscal year 2021-2022 and will appear amid the second wave of concerns about COVID-19.

Macrotech Developers Ltd, formerly Lodha Developers, which recently raised Rs 2,500 crore through an initial public offering (IPO), announced on Friday that it would list its shares on Monday April 19, 2021. The issue was sold from April 7, 2021. -9, in the price range of Rs 483-486 per share. The public offering received a lukewarm response from investors and was subscribed 1.36 times. The reserved portion of qualified institutional buyers (QIB) was subscribed 3.05 times and that of non-institutional investors 1.44 times. While the portion reserved for individual retail investors saw a subscription of 40% and employees 17%.

The question did not sound appealing from the start due to its high debt load. The heavy balance sheet makes investors suspicious. “I expect a discounted offer. The issue can be in the range of Rs 470-490 per share. In my opinion, risk averse investors may be looking to get out of the stock because there are other decent options available in this space, ”Abhay Doshi, founder of UnlistedArena.com, which deals with financial services, told The Bharat Express News Online. pre-IPO and unlisted shares.

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This was the third time the property developer has offered an initial public offering. Previously, in September 2009, Lodha developers had attempted to raise Rs 2,800 crore and later in 2018. However, the global recession forced it to suspend the IPO in 2009, while it pulled out in 2018 due to the unfavorable conditions in the area. “Currently, looking at recent announcements, it’s always best to book the ad wins and wait for the next opportunity,” Vishal Wagh, research manager at Bonanza Portfolio Ltd, told The Bharat Express News Online.

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The IPO of Macrotech, a Lodha Developers group company, was the first public issue of the new fiscal year 2021-2022 and will appear amid the second wave of concerns about COVID-19. Even though the company has a strong presence in the Mumbai Metropolitan Areas (MMRs), the indebtedness of Macrotech Developers is a major cause for concern. Citing costly valuations and high leverage, Aditya Kondawar, Founder, COO, JST Investments, gave a rating of “avoid” when Lodha IPOed. “We believe there are other listed players who are available with minimal debt that can be reviewed,” Kondawar told The Bharat Express News Online.

The company started operations in Mumbai, developing affordable housing projects in the suburbs of Mumbai, and then branched out into other segments and regions of MMR and Pune. As of December 31, 2020, it had completed 91 projects representing approximately 77.22 million square feet of developable area.

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(The recommendations in this article are made by the respective research and brokerage firm. The Bharat Express News Online assumes no responsibility for their investment advice. Please consult your investment advisor before investing.)

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