Keystone Realtors, whose IPO ran from November 14 and November 16, is likely to make a tepid debut on Thursday. Last heard, the stock was commanding a grey market discount of Rs 4 per share, hinting at a muted listing ahead. Earlier on Wednesday, 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.
In case of Keystone Realtors, the IPO could only attract 2.01 times subscription, a bit better than Inox Green Energy's 1.55 times subscription. In case of Keystone Realtors, 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.
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