July 26th 2023.
Suraj Estate Developers, a Mumbai-based real estate player, has refiled its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise capital through an initial public offering (IPO). The IPO will offer up to Rs 400 crore, with each equity share having a face value of Rs 5. The net proceeds are expected to be used for the repayment/prepayment of the aggregate outstanding borrowings of the Company and its Subsidiaries, Accord Estates Private Limited and Iconic Property Developers Private Limited, as well as for the acquisition of land and land development rights, and for general corporate purposes.
The company has been developing residential and commercial properties throughout South Central Mumbai since 1986. According to a report commissioned by the company from Anarock, Suraj Estate Developers is one of the top ten developers in terms of supply, leading with a 15.92% market share. Similarly, the firm ranks first in absorption with a market share of 16.99%.
Operating in both residential and commercial real estate, the firm caters to the discerning clientele across the "value luxury" and "luxury" segments, offering a diverse range of properties ranging from Rs 1.00 crore to Rs 13.00 crore. It has constructed and sold built-to-suit corporate headquarters to institutional clients like Saraswat Cooperative Bank Limited and Clearing Corporation of India Limited. The company also plans to foray into developing boutique office spaces on Tulsi Pipe Road, Mahim, to meet the growing demand for smaller independent offices in the commercial segment.
As of May 31, 2023, the company has completed 42 projects, spanning a developed area of more than 1.05 million square feet in the South Central Mumbai Region. Additionally, they have 11 ongoing projects, covering a developable area of 1.71 million square feet with saleable RERA carpet area of 497,774 square feet, and 21 upcoming projects, expected to encompass an estimated carpet area of 843,192 square feet.
The company holds certain strategic land parcels in Bandra and Santacruz for development. As of May 31, 2023, it possesses land reserves of 10,359.77 square meters, intending to capitalize on the entire FSI potential of more than index 2.0, subject to marketability and receipt of regulatory clearances. They also have additional land parcels spanning 9,631.35 square meters in Bandra, Mumbai, Maharashtra, and 728.42 square meters in Santacruz, Mumbai, Maharashtra, showcasing its commitment to strategic real estate investments and future projects.
Suraj Estate Developers achieved a profit of Rs 32.06 crore in the financial year FY23 against Rs 26.50 crore in the previous year, a rise of 20.98%. Revenue during the year FY23 increased significantly to Rs 305.74 crore from Rs 272.72 crore in the previous year, an increase of 12.11%, primarily due to new projects launched in the value luxury segment and additional floor transactions of their commercial projects. Their profit margin increased to 10.49% in Fiscal 2023 from 9.72% in Fiscal 2022.
The Issue is being made through the Book Building Process, wherein not more than 50% of the Issue shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Issue shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation to Retail Individual Bidders. ITI Capital Limited and Anand Rathi Advisors Limited are the book running lead managers to the issue.
Suraj Estate Developers is well-positioned for future growth and expansion. With a longstanding presence of over thirty-six years in the real estate market in Mumbai, the company has demonstrated its commitment to customer centricity and strategic investments. With its extensive portfolio of projects, the company is aiming to capitalize on the potential of the South Central Mumbai region and take its business to the next level.
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