Lodha Developers plans to file DRHP for Rs 2,700-crore IPO this week

Mumbai-based Lodha Develo­pers plans to file a draft red herring prospectus for initial public offering (IPO) this week, said sources in the know. “The paper­work is done,” informed sources. According to them, Lodha plans to raise Rs 2,500-2,700-crore public issue for de­bt reduction and new projects.

An email sent to Lodha did not elicit any response till the time of going to press.

This will mark the third attempt to raise money thro­ugh an IPO by the property developer known for luxury projects such Trump Towers in Mumbai and Grosvenor Square in London.

Lodha Group considered a listing in 2009 and 2018, but shelved the plan due to unfavourable market conditions.

“This is a good time to launch an IPO in the aftermath of a stamp duty cut and pent-up demand in Mumbai’s real estate market, and stock markets on a tear, setting new benchmarks,” said sources.

There have been no major IPOs by real estate companies in the past few years, except public issues of real estate investment trusts of Embassy Office Parks and Mindspace Business Parks. “This will be a major IPO for the real estate sector and test the waters for more such IPOs,” said a source.

Recently, Mumbai-based realty firm Puranik Builders filed fresh papers with the Securities and Exchange Board of India to raise an estimated Rs 1,000 crore through its initial share sale.

Lodha says it is the largest property developer by sales and has 37 ongoing projects in the country. It posted net sales of Rs 7,000 crore in 2019-20.

Said Saurabh Shatdal, managing director-capital markets at Cushman & Wakefield: “Real estate has been going through a revolution. Reforms and the government’s intent to transform the sector into a more transparent business will help in raising capital. Major listed real estate players have seen strong growth over the past decade, primarily because of a stable and balanced capital structure. It’s an opportune time for Lodha to explore this capital pool, given its size and scale of operations.”