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Keystone Realtors shares rise 3% on market debut, commands m-cap of Rs 6,300 crore

Keystone Realtors shares rise 3% on market debut, commands m-cap of Rs 6,300 crore

Shares of Keystone Realtors rose 3 per cent to trade at Rs 557.40 on BSE by 10.13 am. The company was commanding a market capitalisation of Rs 6,332.72 crore

Keystone Realtors' initial public offering saw a lacklustre response from investors, as the offer was subscribed just 2.01 times during November 14-16 Keystone Realtors' initial public offering saw a lacklustre response from investors, as the offer was subscribed just 2.01 times during November 14-16

Keystone Realtors made a decent debut on stock exchanges, as the scrip got listed at Rs 541 per share on BSE and NSE, a 2.60 per cent premium to their issue price of Rs 541 per share.

The scrip rose 3 per cent within first few minutes to trade at Rs 557.40 on BSE.  The company was commanding a market capitalisation of Rs 6,332.72 crore.

Before this, Inox Green Energy had a poor market debut, as the scrip had listed at 7 per cent discount to its issue price. Also on Monday, Five Star Business Finance had listed at a 5 per cent discount.  

Keystone Realtors' initial public offering saw a lacklustre response from investors, as the offer was subscribed just 2.01 times during November 14-16. Qualified institutional buyers bought shares 3.84 times the allotted quota and high networth individuals 3 times, but retail investors bid for only 0.53 times of the portion set aside for them.

The IPO by the Mumbai-based realtor ran from November 14 and November 16 and could only attract 2.01 times subscription, a bit better than Inox Green Energy's 1.55 times subscription. The quota for qualified institutional buyers received 3.84 times subscription; the NII quota attracted 3.3 times bids while the retail quota went undersubscribed at 53 per cent.

Keystone Realtors carries out property development under the brand name ‘Rustomjee’. The company has 12 ongoing projects and 21 forthcoming projects across the Mumbai Metropolitan Region (MMR). It completed 32 projects till June 30.

The company dominates in a few MMR areas with a market share of 28 per cent in Khar, 23 per cent in Juhu, 11 per cent in Bandra East, 14 per cent in Virar, 3 per cent in Thane, and 5 per cent in Bhandup during 2017-21.

Analysts largely had 'subscribe' ratings on the IPO, even as a sharp sequential drop in pre-sales is a cause for worry. That said, the realtor has been aggressively reducing debt and is looking to partially utilise the IPO fund to reduce the debt on the books further while balancing its new projects in the pipeline, analysts noted.

Based on conservative estimate, Choice Broking is expecting Keystone Realtors to report a 15.5 per cent rise in pre-sales collections over FY22-24E.

Top line is expected to increase 23.5 per cent CAGR to Rs 1,936.5 crore in FY24E, it said. That said, higher operating expenditures are likely to lower Ebitda and PAT margin by 378 basis points and 438 basis points, respectively. RoE is estimated at 6.9 per cent in FY24E compared with 8.5 per cent in FY22.

The brokerage had a 'subscribe with caution' rating on the issue.

Also Read: Keystone Realtors GMP suggests a tepid listing like Inox Green, Five Star on the cards

Also Read: GMP update: Archean Chemical, Kaynes Technology, Inox Green, Five Star Business & Keystone Realtors

Published on: Nov 24, 2022, 10:27 AM IST
Posted by: Priya Raghuvanshi, Nov 24, 2022, 10:24 AM IST