Suraj Estate Developer IPO Review

Suraj Estate Developer IPO Review: India’s real estate sector is booming due to population growth, urbanization and business interest from across the world. This growth presents a promising investment opportunity. This investment opportunity came in the form of the IPO of Suraj Estate Developers Limited.

The IPO will open for subscription on December 18, 2023 and close on December 20, 2023. In this article, we look at Suraj Estate Developers IPO review and analyze its strengths, weaknesses, financials, and GMP. Read on to find out!

Suraj Estate Developer IPO Review

About Us

Established in 1986, Suraj Estate Developers Limited is a company engaged in real estate construction in South Central Mumbai.

The company develops properties across residential and commercial segments and currently has a residential portfolio in Mahim, Dadar, Prabhadevi and Parel markets.

The company has expertise in redevelopment of leasehold properties under Regulation 33(7) of the Mumbai District Development Control and Promotion Regulations (“DCPR”). Projects undertaken by the Company rely entirely on third-party contractors for construction services as the Company does not provide such services itself.

Since its inception, it has completed 42 projects with a developed area of ​​over 1,046,543.20 sq ft in south-central Mumbai. There are also 13 ongoing projects with a developable area of ​​2,034,434.40 square feet, 609,928 square feet of salable RERA carpet area, and 16 upcoming projects with an estimated carpet area of ​​744,149 square feet.

industry information

With a population of over 1.37 billion, India has a huge domestic demand base, attracting companies from all over the world to do business here. This change in demographics will have a major impact on real estate demand.

Additionally, India’s urbanization rate is growing rapidly, and UNDP estimates that approximately 50% of India’s population will be urbanized by 2046. This rapid urbanization is expected to drive medium- to long-term demand for housing, offices and other real estate asset classes. .

Suraj Estate Developer IPO – Finance

A look at Suraj Estate Developers’ financials shows that its total assets have increased from ₹792.00 crores in March 2021 to ₹994.73 crores in June 2023.

Similarly, revenue also increased from ₹244.00 crores in March 2021 to ₹307.89 crores in March 2023. The company’s net profit increased to ₹32.06 from ₹6.28 Crores in March 2021 and its current net profit margin is 10.59%..

During the June quarter of FY24, the company reported gross revenue and net profit of ₹102.81 crores and ₹14.53 crores respectively.

In terms of return, ROE is 58.18% and RoCE is 21.93% in FY23. These ratios indicate good returns on shareholder capital and efficient use of the company’s resources.

The company’s debt-to-equity ratio is 8.31. This means that the company’s leverage is extremely high.

Key players in the market

Below is a list of associates of Suraj Estate Developers available in the market.

• The Oberoi Real Estate Limited
• Suntec Realty Limited
• KEYSTONE PROPERTY LIMITED.
• Shriram Properties Limited
• Mahindra Lifespace Developers Limited
• DB Real Estate Limited
• Herbtown Limited

Company Strengths

• The company has a long standing presence in the Value Luxury Segment and Luxury Segment in South Central Mumbai. In addition, we have built up customer trust over the past 36 years by possessing our own expertise in the redevelopment field.
• The company leverages its brand power by selling a significant portion of units immediately after project commencement and before occupational permits are obtained. This minimizes dependence on construction finance and optimizes returns during the project construction phase.
• The company has a diversified portfolio of residential developments in South Central Mumbai catering to various economic and demographic segments. This helps us cater to different segments of the market and diversify our dependence on specific segments.
• It is considered the most preferred developer in the area as it provides free housing to residents during redevelopment projects.
• The company’s customer engagement has helped it drive more sales by strengthening its brand value.

company’s weaknesses

• The Company is exposed to risks arising from economic, legislative and other changes as well as natural disasters in the south-central region of Mumbai and the overall performance of the real estate sector.
• Increasing competition in the limited geographic areas in which the Company operates may increase land costs. These price increases cannot be passed on to customers and may therefore have a negative impact on our business.
• Our contracts with customers for ongoing and future projects may result in interest payments due to construction delays or project cancellations. Delayed or canceled payments can have a negative impact on your business.
• If the Company is unable to sell its project inventory in a timely manner, its business may be adversely affected.
• The Company’s business is subject to seasonality (monsoons). During the rainy season, our operations may be adversely affected by difficult working conditions that limit to some extent our ability to carry out construction activities and fully utilize our resources.

Suraj Estate Developer IPO Review – GMP

Shares of Suraj Estate Developers Limited were trading at a premium of 14.17% in the gray market on December 13, 2023. The stock was lagging at Rs 411. This gives a premium of Rs 51 per share on a ceiling price of Rs 360.

Key IPO Information

promoter: Seed. Rajan Minataconil Thomas

Book Operations Lead Manager: ITI Capital Limited and Anand Rathi Advisors Limited

Proposal registered by: Link Intime India Private Limited

purpose of the problem

IPO proceeds will be utilized for the following purposes:

• Repay/advance the total amount of outstanding borrowings of the company and its subsidiaries. Its subsidiaries include Accord Estates Private Limited, Iconic Property Developers Private Limited and Skyline Realty Private Limited.
• For the purpose of acquiring land or land development rights
• General corporate purposes

Finishing

In this article, we have looked at the details of Suraj Estate Developers. We concluded that while the company faces strong competition in the regions in which it operates, the growing demand for real estate is a favorable factor that could help the company grow.

What do you think the future holds for your company? Applying for an IPO? Let us know in the comments below.

Written by Aaron Barth

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