Arkade Developers IPO Day 3: Subscription Status, GMP, and Key Insights for Investors

Arkade Developers Ltd, a well-known real estate development company based in Mumbai, launched its Initial Public Offering (IPO) with much anticipation in the market. The IPO, valued at ₹410 crore, offers 32,031,250 equity shares with a face value of ₹10 each. This offering presents a fresh issuance, with no Offer for Sale (OFS) component, providing investors an opportunity to invest directly in the company’s growth trajectory.

Key Dates and Issue Structure

The IPO, which opened on September 17, 2024, will close on September 19, 2024. The price band for the IPO is set between ₹121 and ₹128 per share, and the minimum lot size is 65 equity shares, with subsequent multiples also in blocks of 65 shares. Of the total shares being offered:

50% is reserved for Qualified Institutional Buyers (QIBs),
15% for Non-Institutional Investors (NIIs),
35% for retail investors.

Additionally, Arkade Developers has allocated equity shares worth up to ₹2 crore for employees at a discounted rate of ₹5 per share.

Latest Subscription Data (as of 6 PM on September 18, 2024)

Qualified Institutional Buyers (QIBs): 0.61x
Non-Institutional Investors (NIIs): 58.83x
Retail Investors: 33.28x
Employees: 31.47x
Total Subscription: 29.44x

The overall demand for the IPO has been robust, especially from NIIs and retail investors, reflecting positive sentiment toward the company.

Grey Market Premium (GMP)

One of the significant indicators of an IPO’s potential listing performance is its Grey Market Premium (GMP). As of today, Arkade Developers’ GMP stands at ₹85. This implies that shares of Arkade Developers are expected to list at approximately ₹213 per share, based on the upper end of the price band. This represents a 66.41% premium over the issue price of ₹128.

Investors typically monitor the grey market for signs of listing gains, and the current GMP suggests a strong possibility of positive listing-day returns. However, it’s crucial to remember that grey market premiums are speculative and may fluctuate based on market conditions.

Company Overview

Arkade Developers has established itself as a key player in Mumbai's real estate market, particularly in the residential segment. The company’s focus has been on upscale residential projects, and it has developed a reputation for completing projects ahead of schedule. Since its inception, Arkade has completed 79 residential units in various markets within the Mumbai Metropolitan Region (MMR).

As of July 31, 2025, the company has developed over 2.3 million square feet of residential property. Its projects primarily include both new constructions and redevelopment of existing structures.

Financial Performance

Arkade Developers has demonstrated strong financial growth over recent years. The company’s sales have increased at a CAGR of 39%, while PAT (Profit After Tax) has grown at a CAGR of 34%. Its net worth has also seen steady growth, indicating financial stability and resilience.

The company has also made strides in reducing its debt. For instance, borrowings decreased from ₹149 crore in FY23 to ₹69 crore in FY24. This reduction in debt, coupled with robust revenue growth, positions Arkade Developers favourably in the market.

Use of IPO Proceeds

The proceeds from the IPO will be used to:

Fund ongoing projects.
Initiate six upcoming projects within the Mumbai Metropolitan Region (MMR), with project costs ranging from ₹9.44 crore to ₹62.53 crore.
Meet general corporate purposes, ensuring that Arkade Developers can continue its expansion in Mumbai’s competitive real estate market.

Should You Apply for the Arkade Developers IPO?

Given the strong financials and market presence of Arkade Developers, several brokerage firms have recommended subscribing to the IPO. Some of the key reasons include:

Strong financial performance: The company has consistently delivered impressive sales and profit growth.
Focus on Mumbai real estate: With a presence in one of the most profitable real estate markets in the country, Arkade Developers is well-positioned for continued growth.
Reduced debt levels: The reduction in borrowings strengthens the company’s balance sheet and allows for further expansion.
Positive Grey Market Premium: The current GMP suggests a potential for significant listing gains, making it an attractive option for both short-term and long-term investors.

Expert Opinions

Arun Kejriwal, founder of Kejriwal Research and Investment Services, expressed optimism about the IPO, noting the company's strong financials and operations. Similarly, Mohit Gulati, CIO and Managing Partner of ITI Growth Opportunities Fund emphasized that while the real estate market in Mumbai may have slowed, Arkade Developers is in a prime position for growth, given its track record and well-planned projects.

Despite concerns about a potential slowdown in real estate demand, especially in the Mumbai Metropolitan Region, experts believe that Arkade Developers’ focus on upscale projects and its ability to finish projects ahead of schedule set it apart from competitors.

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Arkade Developers’ IPO presents a promising opportunity for investors, particularly those looking for exposure to the Mumbai real estate market. With a strong GMP, impressive financials, and a focus on growth, the company is well-positioned for future success. Investors should consider subscribing to the IPO for both short-term listing gains and long-term growth potential.

[Disclaimer: This article is for informational purposes only. Please consult with financial advisors or conduct thorough research before making any investment decisions related to Arkade Developers IPO or any other securities.]