By Dominick Rodrigues
Mumbai : Macrotech Developers Limited (formerly known as Lodha Developers Limited), today announced its Initial Public Offering (IPO) of Equity Shares priced at Rs 483 to Rs 486 per share to raise upto Rs 2500 crores via a fresh issuance of shares. The IPO will open on April 7, 2021 and close on April 9, 2021.
Abhishek Lodha, MD/CEO, Macrotech Developers Limited, while addressing media virtually here, said around Rs 335 crores would be going towards debt repayment and general purposes. With India’s (including MMR) real estate residential market worth Rs 960 billion, he said the housing demand is at the cusp of cyclical inflection and rise in consumer preference for branded Tier-I residential developers.
“While China does one crore homes per year, housing demand in India is structurally strong and in upswing to unleash a large amount of volume growth. The Industry — being at inflection point — could see disproportionate growth. Around 15 lakh people are graduating per year from Tier-I and Tier II areas, while narrowing of home loan rates and rental yield lows is leading to increasing desire in people to own their own homes.”
“While there is a rise in preference for branded, Tier-I developers, regulatory push and reduced real estate funding has significantly impacted Tier-II, unbranded developers. Our sales of Fy14-FY20 of Rs 50,000 crores of homes and units, and 5.74 crore square feet being delivered, further augments our position in this segment, affordable and mid-income housing, besides development of commercial projects as part of mixed-use developments.”
“While the markets not being conducive was reason behind this IPO not being launched earlier, the present IPOs feedback was good and expected to reduce the December 2020 debt of Rs 16,700 crores to Rs 12,700 crores – post IPO – where the focus earlier had been on continued construction 2017-19 and in challenging times. In UK, we have a Rs 1600 crore contingent liability, but we have no plans absolutely to do anything outside India except focusing on MMR and Pune regions. We sold some of our Assets in the past and will continue this going forward.”
“As the lockdown ends, there will be a huge spurt in real estate sales, especially during marriages. Demand for housing is secular and will be the +Sunrise+, Boom industry over the years,” Lodha reiterated.
Axis Capital Limited, J.P. Morgan India Private Limited, Kotak Mahindra Capital Company Limited are the global coordinators and book running lead managers and ICICI Securities Limited, Edelweiss Financial Services Limited, IIFL Securities Limited, JM Financial Limited, YES Securities (India) Limited, SBI Capital Markets Limited and BOB Capital Markets Limited are the book running lead managers to the Initial Public Offering.
Macrotech Developers – which is amongst the largest real estate developers in India through its residential sales between FY14-20 – has its strengths in, amongst others, its core business of residential real estate across consumer segments with a focus on affordable and mid income housing. On an average, it completed 109 lakh square feet of developable area during FY 2017-20, of which an average of 77 lakh square feet deliveries are in the affordable and mid-income housing segment. Also, the realty player clocked 57.77% of residential sales value from affordable and mid income housing in FY 2020, which further demonstrates its focus in this segment.
Macrotech Developer’s Palava Industrial and Logistics Park of ~800 acres land is well placed in the MMR region. Driven by high quality infrastructure, well planned parks and proximity to Navi Mumbai, JNPT port and the upcoming international airport, the park benefits from its easy connectivity to the full social eco-system of Palava City. The park offers a range of options including built-to-suit structures, standard structures and land parcels.
In 2021, Bati Mumbai Private Limited (“Batilogistics”) signed an agreement to purchasea 30-acre land parcel at Palava Industrial and Logistics Park for approx.Rs 106 crores. In 2019, Macrotech Developers entered into a joint venture partnership with ESR Mumbai 3 Pte. Limited, a subsidiary of ESR Cayman Limited–an Asia Pacific focused logistics real estate platform. Additionally, it has a non-binding term sheet valued at approximately Rs 334 crs including stamp duty with a subsidiary of an affiliate of Morgan Stanley Real Estate to set up an industrial park of approximately 130 acres at Palava.
Macrotech Developers Limited has land reserves of approximately 3803 acres for future development in MMR with a potential to develop approximately 322 million square feet of Developable area as on Dec 31, 2020.
Macrotech Developers Limited (Formerly known as Lodha Developers Limited) was incorporated as ‘Lodha Developers Private Limited’ on September 25, 1995 in the state of Maharashtra at Mumbai as a private limited company under the Companies Act, 1956. The company commenced operations in Mumbai, developing affordable housing projects in the suburbs of Mumbai, and later diversified into other segments and regions in the MMR and Pune. As of December 31, 2020, It has 91 completed projects comprising approximately 77.22 million square feet of Developable Area, of which 59.13 million square feet is in affordable and mid-income housing, 12.15 million square feet is in premium and luxury housing, 5.21 million square feet is in office space and 0.74 million square feet is in retail space.
