As per sources, Lodha Developers, also known as Macrotech Developers, will file a draft red herring prospectus or DRHP for an initial share sale sometime this week. The real estate developer is planning to raise ₹2,500-2,700 crores via the IPO (initial public offering).
Interestingly, this is almost half of the ₹5,500 crores target the company had set during a similar move in 2018. Overall, this will be Lodha’s third try at an IPO after the previous two attempts were cancelled due to the financial crises in 2009 and 2018, respectively.
The fresh proposal for an IPO by Lodha comes at a time when the real-estate sector has seen some gains after being on the decline for months. “The DRHP is expected to be filed in a day or two. The IPO proceeds will be used to pare debt as well as for new projects,” a source familiar with the matter was quoted as saying by Livemint.
Lodha Group is one of the country’s largest real-estate developers in terms of residential sales. The company has said that it registered ₹2,500 crores worth of bookings in the recently concluded quarter (December 2020).
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“The residential sector is a different ball game and comes with its own risks compared to stable, income-generating commercial office assets. We have to see how the Lodha IPO plays out and if it does well, it will be a turning point for the housing sector,” a Mumbai based property consultant said under anonymity.
It’s worth pointing out that despite seeing a gradual improvement in its liquidity, Lodha has debt maturities of around $800 million in India and the UK (London) over an 18 month period.
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