GMP, the key information to know before subscribing
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Real estate developer Shriram Properties, part of the Shriram Group, is set to launch its Initial Public Offering (IPO) for public subscription today which will close on December 10. The price range has been set at ??113-118 per share. Shriram Properties raised a bit more ??268 crore from key investors ahead of its IPO.
This public issue includes a new issue of capital shares worth ??250 crore and an offer to sell (OFS) of ??350 crores. The company has reduced the size of its sales offering to ??350 crore ??550 crore earlier.
According to market watchers, Shriram Properties shares command a premium (GMP) of ??20 on the gray market. The company’s shares are expected to be listed on the BSE and NSE stock exchanges on December 20, 2021.
Giving a ‘Subscribe’ rating to the issue, analysts at Choice Broking said, ‘SPL is one of the leading residential real estate development companies in South India, with a presence in key South Indian markets. from Bengaluru and Chennai. These two cities are among the top two residential housing markets in India and will continue to be among the top cities in terms of growth. SPL’s business was severely affected during the second wave of the pandemic and is therefore expected to be relatively better in the coming quarters.
The company plans to use the net proceeds of the new issue for debt repayment and / or early repayment and general corporate purposes.
âIf we look at the company’s financial data, the numbers don’t look good, the company reported a 20.7% drop in operating revenue and reported negative after-tax profit of ??60 crores. If we look at valuations, the IPO has been priced over book value by 2.27 times and peers like Sobha Limited, Prestige are trading at a price over book value of around 3 times. We have a positive outlook on the IPO of Shriram Properties Limited, âsaid Yash Gupta, Equity Research Analyst, Angel One.
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