Arkade Developers' IPO, priced between INR 121-128 per share, opened from 16 to 19 September 2024, aiming to raise INR 410 crores. The offering, which includes only new shares, saw strong interest, being subscribed nearly 70 times, with significant contributions from anchor investors who provided INR 122.40 crore. The proceeds will fund current and future projects, including land acquisitions. Arkade Developers, known for high-end residential properties in Mumbai, has developed 1.80 million square feet and sold 792 units since 2017. The shares, managed by Unistone Capital, are set to be listed on 24 September 2024.
Arkade Developers' initial public offering (IPO), which opened for bids on Monday, 16 September 2024, and closed on Thursday, 19 September 2024, generated significant interest from investors. The IPO had a price range set between INR 121-128 per share and consisted entirely of a fresh issue of shares, raising a total of INR 410 crores. There was no Offer for Sale (OFS) component in this IPO, and investors were allowed to place bids in multiples of 110 equity shares.
Prior to the public offering, the company secured INR 122.40 crores from anchor investors on Friday, 13 September 2024. Major institutional investors like BNP Paribas Financial Markets - ODI, Societe Generale - ODI, and Saint Capital Fund were among the prominent anchor investors. The firm allocated 95.62 lakh shares to them at INR 128 per share. This pre-offering investment demonstrated strong institutional support and created momentum for the upcoming IPO. Of the total issue size, 50% was reserved for Qualified Institutional Buyers (QIBs), 35% was set aside for retail investors, and the remaining 15% was allocated to non-institutional investors.
The IPO was met with overwhelming demand from investors across all categories. By 3 p.m. on the final day of bidding, Arkade Developers had received bids for 162.96 crore shares, nearly 70 times the 2.37 crore shares available. The non-institutional investors showed the highest level of enthusiasm, oversubscribing their portion by 129.26 times. QIBs also demonstrated strong interest, placing bids 64.35 times their allocated shares. Retail Individual Investors (RIIs) were highly active as well, bidding 45.31 times their allotted portion.
The company's IPO success was further bolstered by its strategic plans to utilize the net proceeds. A portion of the raised funds will be directed towards the company's current and future initiatives, while the remaining amount will be used for general corporate purposes and to acquire land for real estate projects that are yet to be identified. Arkade Developers has firmly established itself as a key player in the real estate sector, with a focus on developing high-end lifestyle residential properties in Mumbai, the financial capital of India. The company specializes in both new projects and the redevelopment of existing buildings.
As of 31 July 2023, Arkade Developers had developed 1.80 million square feet of residential property, including partnerships where it holds a majority interest. Between 2017 and the first quarter of 2023, the company launched 1,040 residential units and successfully sold 792 of them within the Mumbai Metropolitan Region (MMR) in Maharashtra.
The remarkable subscription rates during the IPO, particularly the nearly 70 times oversubscription, reflect the high level of investor confidence in Arkade Developers' future prospects. With the backing of anchor investors, robust participation from institutional and retail investors alike, and a clear strategy for future growth, the company is poised for further success as its shares are set to be listed on 24 September 2024.
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