Macrotech completes Rs 4,000-crore QIP, says ‘largest ever’ in real estate sector in India

Macrotech Developers Limited, formerly Lodha, on Thursday announced the closure of its QIP, which it described as “largest ever” by a real estate developer in India.

The Rs-4,000 crores institutional placement received a robust response from both existing and new as well as global and domestic investors. The book was oversubscribed by more than 3 times within 5 hours of issue opening and witnessed traction from a diversified set of investors such as sovereign funds, pension funds, mutual funds, insurers etc, it said.

The developer issued 3.4 crore new shares resulting in a 7.5% dilution in pre-issue outstanding capital. The floor price of the issue was Rs 1184.70. On Thursday, Macrotech Developer stock was trading at Rs 1,367.35, down by 4.30% on an intra-day basis at NSE. The stock price is up nearly 200% year-to-date since IPO. 

More than 90% of the book was allocated to marquee long only global investors. Existing shareholders of the company such as Capital Group, Ivanhoe Cambridge (CDPQ arm), Wellington, Nomura, Manulife, Nippon, Max Life enhanced their investment with participation in the QIP. The institutional placement also saw new marquee investors like GIC, Oppenheimer, Universities Superannuation Scheme (USS), Amundi, Tata Mutual Fund etc. endorsing the growth potential of the housing industry and Lodha’s leadership position therein.

Lodha said it intends to use the proceeds to grow in under-represented micro-markets of Mumbai Metropolitan Region (MMR) and Pune in a capital-efficient manner. The company is also exploring plans to enter into the Bangalore market to cater to the needs of even better quality development in a city which is seeing significant creation of technology jobs and wealth creation.

The company plans to nearly double its pre-sales to Rs 14,000 crores by FY24 and further grow to Rs 20,000 crores by FY26.

Abhishek Lodha, Managing Director, Macrotech Developers Ltd. said, “We see that all the structural factors are in place for significant growth in volumes in housing, especially in the middle income and affordable segments, which is a focus area for us. With this fund raise, we are well on course of achieving dual target of deleveraging and capital light expansion through JDA model”.

“Our debt to equity now stands at 0.75x. The Lodha brand is seen as delivering the best development quality and services for customers and the best NPV for land owners. We are seeing a very robust pipeline of JDA deals and plan to invest nearly INR 3,000 crores over the course of next 6 quarters through these JDAs and add about Rs 40,000 crores worth of GDV to our portfolio,” he added.