Macrotech Developers trades above issue price; up 22% from debut day's low

The stock rallied 11% to Rs 514 in the intra-day trade today and is up 22 per cent from its Monday's low of Rs 421 on the BSE.

Shares of Macrotech Developers (MDL), formerly known as Lodha Developers, moved higher by 11 per cent to Rs 514 on the BSE in the intra-day trade on Tuesday, trading above its issue price of Rs 486, after making a weak debut on Monday.

At 03:05 pm, the stock was trading 8.5 per cent higher at Rs 502, as compared to a 0.51 per cent decline in the S&P BSE Sensex. A combined 5.72 million equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.

MDL had made a weak debut on the bourses on Monday as the stock listed at Rs 439, a 10 per cent discount from its issue price of Rs 486 per share. It had ended at Rs 463.15, 5 per cent lower against its issue price, after hitting an intra-day low of Rs 421.15. With today’s gain, the stock has recovered 22 per cent from its Monday’s low on the BSE.

The initial public offering (IPO) of Macrotech Developers had gotten a decent subscription as the issue was subscribed 1.36 times. The qualified institutional buyers (QIBs) category was subscribed 3.05 times. The non-institutional investor’s category was subscribed 1.44 times. However, the retail portion saw tepid response, with 40 per cent subscription.

MDL has a diversified portfolio of residential developments, spread across price points and micro-markets in the MMR, catering to a wide spectrum of economic and demographic segments, from luxury residences in South Mumbai to large, integrated townships in the extended suburbs offering affordable homes.

The key risk and concerns, howeve, are substantial amount of debt, the reported a restated loss in 9MFY21; may incur losses in future and spread of Covid-19 may affect MDL’s operations in near future, ICICI Securities said in IPO note.

"The IPO by Lodha Group comes at an opportune time when the Indian real estate market is at a critical and transformative stage. We are increasingly seeing a clear distinction between grade A developers with proven track record of delivering projects and other unorganized players who lack both the expertise and the financial wherewithal to complete projects. At a time when housing sales are tilted more towards ready projects given the growing uncertainty around under-construction projects, good quality builders will stand to benefit immensely out of this crucial phase.  It is at this juncture that developers like Lodha will emerge even stronger given the robust performance and scale they have achieved over the years,” Anurag Mathur, CEO, Savills India, India’s premier professional international property consulting firm,  had said on the Macrotech Developers (Lodha Group) IPO subscription opening.