Popular Mumbai-based real estate developer Arkade Developers Ltd is preparing to launch its IPO. The company is engaged in developing residential properties in the premium segment. Its revenue grew at an exponential rate from Rs. 113 crore in FY21 to Rs. 237 crore in FY22.
Arkade Developers Ltd has filed its Draft Red Herring Prospectus (DRHP) with the market regulator SEBI. It is planning to raise approximately Rs. 430 crore to fund its ongoing development projects, upcoming ventures, acquisitions and other corporate purposes.
If you are looking forward to leveraging the growth of Indian real estate, you can consider investing in Arkade Developers IPO. Read to get more insights about the same.
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About the Company
Arkade Developers Ltd, a Mumbai-based company, is one of the fastest-growing real estate developers in the country with a total developed area of 1.8 million sq. feet. The company has a significant presence in Maharashtra, which is one of the biggest and most expensive real estate industries in the country.
It has a strong brand proposition and a successful track record with an emphasis on building high-end residential spaces that are aesthetically planned and designed. They are primarily targeting premium budget customers along with all the lifestyle amenities and facilities.
The company has several high-value ongoing projects on its portfolio namely Arkade Aura, Arkade Prime, Arkade Aspire and more. Currently, it’s developing an area of 2 million square feet for 7 projects in Mumbai.
IPO Details and Objectives
The company is seeking to raise Rs. 430 crore through an entirely fresh issue of equity shares. However, it has not yet announced its IPO opening or closing date. Unistone Capital Private Limited is the sole merchant bank underwriting the public issue while Bigshare Services Private Limited is the registrar.
Arkade Developers wants to raise funds to fulfil several business objectives, which are as follows:
- Its primary objective is to fund ongoing projects and several upcoming ventures.
- The company is planning an acquisition which is not yet identified for more real estate projects.
- Some funds will be used for general corporate purposes.
- Arkade Developers is expecting publicity and visibility from its IPO which would enhance its brand image.
Company Financials
Here’s a summarised version of the financial statements of Arkade Developers Limited.
| Particulars | For the Financial Year Ending (In Rs. Millions Except EPS) | ||
| March 31, 2023 | March 31, 2022 | March 31, 2021 | |
| Total Assets | 5,553.04 | 3,699.67 | 3,497.38 |
| Total Liabilities | 3,550.41 | 2,206.7 | 2,496.56 |
| Total Expenses | 1,614.14 | 1,788.89 | 834.81 |
| Total Revenue | 2,240.13 | 2,371.82 | 1,131.85 |
| Profit/Loss After Tax | 506.61 | 508.44 | 217.18 |
| EBITDA | 683.25 | 699.72 | 305.01 |
| EPS (Basic and Diluted) | 3.33 | 3.32 | 1.39 |
Strengths of the Company
Arkade Developers being one of the fastest-growing real estate developers has some competitive advantages that set it apart from other players in the market. Here are some of the strengths of the company:
- Its projects have a strategic advantage as Maharashtra is one of the biggest and highest-value real estate markets with substantial profit margins.
- The company’s promoter and managing director is a second-generation real estate developer with more than two decades of industry experience. Also, the senior management team is composed of highly skilled and experienced professionals capable of bringing unmatched value to the company.
- Arkade Developers has an integrated business model with in-house resources to initiate a project till its completion. Its in-house team includes a business development team, sales and marketing team, legal team, etc. Having a proficient legal team allows this company to conduct due diligence before any property acquisition to avoid legal disputes.
- Maharashtra is one of the largest residential real estate markets in India and the demand for residential properties is always high. Hence, timely completion of projects is another key aspect of success. Arkade Developers’ track record makes it easy to find buyers.
Risks Involved
Every business comes with certain risk factors embedded in it. Here are some of the risk factors associated:
- The company may not be able to acquire suitable land for its upcoming ventures as a result of which might affect its overall profitability.
- Sometimes due to certain circumstances, it may not be able to complete projects on time i.e. before the expected date. This could have a negative impact on the company’s overall profitability and reputation.
- The company is subject to penalty charges for failure to comply with the agreed terms such as delay in completion of projects or as the case may be. These liabilities and costs might have a negative impact on its cash flows.
Summary
Arcade Developers Ltd is one of the fastest-growing residential real estate developers with a significant presence in Mumbai. In the last couple of years, its revenue grew at an exponential rate. Moreover, the company has a massive order book with back-to-back projects lined up. If you are planning to invest, it is always recommended to go through the DRHP or RHP before making any decision.
Also Read: IPO investment strategy
Frequently Asked Questions
The fresh issue size of the IPO is approximately Rs. 430 crore.
Amit Mangilal Jain is the promoter of the company. Furthermore, he is also the managing director and chairman of the company.
Arkade Realty and Arkade Paradigm are the subsidiaries of Arkade Developers Ltd.
The anchor investor bidding date is usually one working day before the IPO opening date. However, the issue or bid opening date has not yet been announced by the company.
