Chennai's Casagrand Premier Builder has submitted a draft red herring prospectus (DRHP) to SEBI, seeking to raise INR 1,100 crore through an IPO. This plan encompasses a fresh issue of INR 1,000 crore and an offer for sale of INR 100 crore. The company enjoys a notable market share of approximately 24% in launches and 20% in demand within Chennai's residential sector. It intends to utilise the funds for repaying certain borrowings and enhancing its digital infrastructure. With 101 completed projects and 42 ongoing, Casagrand is also expanding into Bengaluru, Hyderabad, and Coimbatore, demonstrating significant growth in revenue and profits recently.
Casagrand Premier Builder, a prominent Chennai-based real estate company, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise INR 1,100 crore through an initial public offering (IPO). The IPO will feature a fresh issue of INR 1,000 crore and an offer for sale of up to INR 100 crore by the promoter shareholders. With a market share of 24% in terms of launches and 20% in demand from January 1, 2017, to March 31, 2024, Casagrand has established itself as a dominant player in the market. The sale will include INR 50 crore of equity shares from both Arun MN and Casagrand Luxor.
The book-running lead managers for the issue are JM Financial and Motilal Oswal Investment Advisors, while KFin Technologies serves as the registrar. The company may consider raising an additional INR 200 crore through a pre-IPO placement, limited to 20% of the fresh issue size. The company will allocate INR 150 crore from the fresh issue to prepay or repay certain borrowings, and INR 650 crore to repay specific borrowings by its wholly-owned subsidiaries. The offer will follow the book-building process, with not less than 75% of the total offer earmarked for allocation on a proportionate basis to qualified institutional buyers. Additionally, the company will allocate 15% of the remaining shares to non-institutional investors and offer 10% to retail investors.
Founded in 2003 under the leadership of Arun MN, Casagrand has firmly established itself within key micro-markets in Chennai. The company offers a diverse portfolio of residential projects under the "Casagrand" brand, focusing primarily on mid-range homes but also catering to luxury and affordable segments. The company has developed in-house expertise across all stages of project development, from identifying and acquiring land to designing, constructing, marketing, and delivering the final product.
In addition to its operations in Chennai, Casagrand has expanded its footprint to other key cities like Bengaluru, Hyderabad, and Coimbatore. As of May 31, 2024, the company has successfully completed 101 projects, covering a saleable area of 21.45 million square feet. The company is actively working on 42 ongoing projects covering 33.60 million square feet, with 17 upcoming developments anticipated to offer an additional 13.15 million square feet of saleable area. In the financial year 2024, the company recorded pre-sales volumes of 7.24 million square feet. Casagrand's revenue from operations grew at a compound annual growth rate (CAGR) of 18.02%, increasing from INR 1,876.82 crore in FY22 to INR 2,613.99 crore in FY24. Its profit after tax surged from INR 146.08 crore in FY22 to INR 256.95 crore in FY24, achieving a CAGR of 32.63%.
Casagrand Premier Builder's filing for a INR 1,100 crore IPO marks a significant step in its growth trajectory as a leading player in the Chennai real estate market. With a strong market presence and a robust financial performance, the company is well-positioned to enhance its operations and expand further into key cities. This move not only reflects its commitment to growth but also aims to strengthen its capital structure to support ongoing and future projects.
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