Signature Global (India) IPO subscribed 21% on Day 1 so far; retail portion partially booked

The Rs 730-crore initial public offering (IPO) of Signature Global (India) saw a muted response from the investors during the initial few hours of the bidding process on the day one. The issue opened for bidding on Wednesday, September 20 and the-three-day bidding will close on Friday, September 22.

Signature Global is selling its shares in the price band of Rs 366-385 apiece and investors can make a bid of a minimum of 38 equity shares and its multiples. The issue includes a sale of fresh equity shares worth Rs 600 crore, while an offer-for sale (OFS) of up to 2.7 crore equity shares worth Rs 601 crore.

According to the data, the investors made bids for 23,08,918 equity shares, or only four per cent, compared to the 1,12,43,196 equity shares offered for the subscription by 1.45 pm on Wednesday, September 20. The company has reduced its issue size as it was earlier intending to raise about Rs 1,000 crore.

The allocation for retail investors was booked 52 per cent, while the portion for qualified institutional bidders (QIBs) saw a subscription of 42 per cent. However, the portion reserved for non-institutional investors was yet to attract any bids as of the same time.

Signature Global claims to be the largest real estate development player in the National Capital Region of Delhi (Delhi-NCR) in affordable and lower mid-segment housing, majorly in Gurugram, Ghaziabad and Karnal. Signature Global sold 27,965 residential and commercial units, all located within the Delhi NCR region as of March 2023.

Signature Global raised Rs 318.5 crore from 19 anchor investors, allocating of 82,72,700 equity shares at Rs 385 per share. ICICI Securities, Kotak Mahindra Capital Company and Axis Capital are lead managers to the issue, while Link Intime India is the registrar.

Brokerage firms are not very positive on the issue.  Keeping in mind the real estate industry and fluctuating demand style is a concern, said Sushil Finance. "Looking at both opportunities and challenges faced by the company and keeping the further performance of the company, Cautious investing by cash surplus investors as and when the performance turns around," it said.

Its business and profitability are significantly dependent on the performance of the real estate market in the Delhi NCR region, generally, and particularly in Gurugram and Sohna micro-markets in Haryana, said Ventura Securities. "The withdrawal of certain benefits under the Haryana Affordable Housing Policy, 2013 and the Deen Dayal Jan Awas Yojna, may adversely affect business."

"It may not be able to successfully identify and acquire suitable land or enter into collaboration agreements, which may affect its business and growth prospects. Further, while acquiring land parcels or other properties or entering into collaboration agreements after conducting due diligence and obtaining independent title reports for the land," it said, not rating the issue.


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