Arkade Developers IPO opens for subscription. Should you bid or skip?

The initial public offering (IPO) of Arkade Developers has opened for subscription and will be available until September 19. Ahead of the issue opening, the company raised Rs 122 crore from anchor investors.

The issue is a fresh equity sale totaling Rs 410 crore. In the public offering, approximately 50% is reserved for qualified institutional buyers, 35% for retail investors, and the remaining 15% for non-institutional investors.

Arkade Developers IPO price band

The price band has been fixed at Rs 121-128 per equity share, where investors can bid for 110 shares in one lot.

Arkade Developers IPO GMP

In the unlisted market, the company's shares have been trading with a GMP of Rs 70, which indicates a premium of 54% to the issue price.

Arkade Developers IPO review

Analysts advised investors to subscribe to the IPO as the company is strategically positioned to leverage the growing demand for real estate in the Mumbai metro region, driven by rapid urbanization.

"Financial growth is expected to be fueled by its upcoming projects, a strategic focus on developments in Mumbai's eastern suburbs, and its blended business model. On a post-issue basis, the company trades 14.46x EV/EBITDA (FY24). We have a Subscribe rating for the issue," said Arihant Capital.

Other details

The company proposes to utilize the net proceeds towards the development of their ongoing projects, and their upcoming projects and funding acquisition of future real estate projects and general corporate purposes.

Arkade Developers is a leading real estate development company with a significant presence in Mumbai. Its operations are concentrated on the development of premium aspirational lifestyle residential premises in the region.

As of June 2024, the company has developed 2.2 million square feet of residential property (including through partnership entities in which it holds the majority stake).

The business model prioritizes the development of high-end and premium budget sustainable residential projects, with an emphasis on aesthetic design and lifestyle amenities.

While the company's initial projects were stand-alone residential buildings, their current portfolio of ongoing projects includes gated communities such as Arkade Nest, Arkade Crown and Arkade Aspire, Arkade Prime, and Arkade Aura.

Arkade Developers revenue in FY24 increased 189% year-on-year to 635 crore, while net profit also more than doubled to Rs 123 crore in the same period.

Unistone Capital is the sole Book Running Lead Manager (BRLM) for the issue. The equity shares of the company will be listed on BSE and NSE.