Arkade Developers IPO Subscribed Nearly 70 Times on Day 3; GMP Surges Amid Strong Demand

Arkade Developers’ initial public offering (IPO) saw overwhelming demand on its final day of bidding, with the issue being subscribed nearly 70 times by 3 PM on September 19, 2024. The ₹410 crore public offer has received bids for 162.96 crore shares against an offer size of 2.37 crore shares, indicating a strong response from non-institutional investors (NIIs).

The non-institutional investors’ portion was subscribed an impressive 129.26 times, while the quota for qualified institutional buyers (QIBs) was booked 64.35 times. Retail individual investors (RIIs) also showed high interest, with their portion being subscribed 45.31 times.

In the unlisted grey market, Arkade Developers' shares are trading at a grey market premium (GMP) of ₹85, translating to a 66% premium over the issue price. The surge in GMP reflects the robust demand for the company’s shares among investors.

Ahead of the IPO launch, Arkade Developers had already raised ₹122.40 crore from anchor investors. The allocation was made to prominent investors such as Societe Generale, Intuitive Alpha Investment Fund PCC-Cell 1, Saint Capital Fund, and Visionary Value Fund.

The IPO price band was set at ₹121-128 per share, and at the upper end of this range, the company will have a post-listing market capitalization of ₹2,376 crore. The IPO comprises a fresh issue of equity shares worth ₹410 crore, with no offer-for-sale (OFS) component included.

Proceeds from the IPO will be used to fund the development of Arkade Developers' ongoing and upcoming real estate projects. Additionally, the company plans to use the funds for the acquisition of future real estate projects and for general corporate purposes.

Arkade Developers is a growing real estate company with a significant presence in Mumbai. As of July 31, 2023, the company had developed approximately 1.80 million square feet of residential property, including projects developed through partnership entities in which Arkade holds a majority stake.

Between 2017 and Q1 2023, Arkade Developers launched 1,040 residential units and sold 792 units in various markets within the Mumbai Metropolitan Region (MMR) in Maharashtra. The company's revenues for fiscal years 2023, 2022, and 2021 stood at ₹224 crore, ₹237 crore, and ₹113 crore, respectively.

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Unistone Capital is the sole book-running lead manager (BRLM) for the issue, and Bigshare Services Pvt Ltd is the registrar. The allotment of shares for Arkade Developers’ IPO is expected to be finalized by September 20, 2024, with a tentative listing date of September 24, 2024, on both BSE and NSE.