IPO-bound Kalpataru Ltd's net loss narrows to Rs 101 cr in last fiscal

Real estate firm Kalpataru Ltd, which plans to launch its maiden public issue, has posted a consolidated net loss of Rs 100.74 crore during the last financial year on lower income.

Its net loss stood at Rs 200.73 crore in the preceding 2022-23 fiscal.

Last week, Mumbai-based Kalpataru Ltd filed a preliminary document with capital markets regulator Sebi to launch its initial public offering (IPO) to raise up to Rs 1,590 crore, mainly to reduce debt.

The proposed IPO comprises of fresh issue of shares, having a face value of Rs 10 each, aggregating up to Rs 1,590 crore.

It would use Rs 1,192.5 crore for repayment/prepayment of its debt.

According to the Draft Red Herring Prospectus (DRHP) filed with Sebi, the company's total income also declined to Rs 2,029.93 crore in the last fiscal from Rs 3,716.61 crore in the 2022-23 financial year.

"We are an integrated real estate development company involved in all key activities associated with real estate development, including the identification and acquisition of land (or development rights thereto), planning, designing, execution, sales, and marketing of our projects," the DRHP said.

The company has a portfolio of 40 ongoing, forthcoming and planned projects, comprising 49.77 million square feet of area. Of these, 25 projects having 22 million square feet are currently underway.

As of March 31, 2024, Kalpataru said that 95.49 per cent of the total developable area and 97.39 per cent of its total sales across its ongoing, forthcoming and planned projects are attributable to residential projects.

While a majority of the company's projects are located in the Mumbai Metropolitan Region (MMR) and Pune in Maharashtra, it has two ongoing projects in Hyderabad, Telangana and Noida, Uttar Pradesh. It has land banks in Surat, Gujarat; Nagpur, Maharashtra; and Udaipur, Rajasthan.

"We have incurred losses for the Financial Years 2024, 2023 and 2022, primarily due to the manner in which we recognise revenue under our accounting policies..., pursuant to which we recognise revenue based on the fulfilment of performance obligations as set out in the contracts with our customers," Kalpataru explained.

Revenue for certain projects is recognised at a "point in time", which means when the customer obtains control of the promised assets which are linked to the occupancy certificate of the project.

However, all expenses related to sales, marketing and administration are charged to the profit and loss account during the year of incurrence, it said.

"In addition, we have experienced increases in our cost of sales and other operational expenses, among others, which have resulted in our total expenses exceeding our total income (as recognised under Ind AS) for such financial years," the company said.

Kalpataru Ltd is part of the Kalpataru group. Other companies in the group are Kalpataru Projects International Ltd, Property Solutions (India) and Shree Shubham Logistics Ltd.

Kalpataru Group was established in 1969 by Mofatraj P Munot and has a legacy of 55 years.

The group has a multi-national presence and operations in EPC contracting for power transmission and distribution, oil and gas, railways, civil infrastructure projects, warehousing and logistics, and facility management.

Further, Kalpataru Projects International Ltd is listed on the NSE and BSE.