Shriram Properties, the real estate arm of Shriram Group, has said that it will go for an Initial Public Offer (IPO) after the Union Budget, this year. The company is planning to raise Rs 750-800 crore through the IPO.
The proposed IPO is expected to mobilise money for company's future expansion and will help investors partially dilute the stake.
"Stock market has been going through rough weather for some period now. Large caps are doing well, while mid- and small-caps are struggling. We expect the budget is going to be a great one. Immediately after the budget we will look at our IPO," said M Murali, chairman and managing director, Shriram Properties Ltd. The company has received a regulatory approval with validity till April 2020, to go for IPO.
While the company has an approval to raise around Rs 1250 crore through primary and secondary markets, considering the current situation, it would be looking at raising around Rs 750-800 crore, Murali added.
Around Rs 250 crore would be raised through the primary market, while the rest would be raised in the secondary market.
"We have raised around $800 million from private equity capital so far, including the project-based funding. In the holding company, around 58 per cent is held by the private equity investors," Murali said.
In the last three years, the company has seen growth in its business, It developed 2.4 million sq ft of real estate in 2017-18, around 3.5 million sq ft in 2018-19, and expects to develop 4 million sq ft during the current fiscal year. Next year, it would develop 5 million sq ft, he added.
The company is focusing on affordable and mid-market segments in real estate and has seen growth in office space development. Demonetisation, Goods and Services Tax (GST) and the Real Estate (Regulation and Development) Act, 2016, has brought in huge changes in the sector and at present, there are around 50 to 60 large players, who caters to around 90-95 per cent of the market.