Marquee investors, including Nomura, Goldman Sachs, Quant MF, Nippon India MF, Kotak MF among others invested in the company through anchor participation.
Analysts advised investors to avoid subscribing to the issue amid profitability concerns.
“Though the company has a good market share in its focused regions, its continued losses in the last three financial years make us cautious about the IPO. We, therefore, recommend an “Avoid” rating for the issue,” said StoxBox.
Signature Global is the largest real estate development company in the national capital region of Delhi in affordable and lower mid-segment housing in terms of units supplied between 2020 and the three months ended March 31, 2023, with a market share of 19%.
The company has reduced the total offer size to Rs 730 crore from the initially planned Rs 1,000 crore.
The IPO comprises fresh equity issue of Rs 603 crore and an offer for sale (OFS) segment of Rs 127 crore by selling shareholder International Finance Corp. The company has set the price band at Rs 366-385 per share.About 75% of the issue is reserved for qualified institutional buyers, 15% for non-institutional investors and the rest 10% for retail investors.
Net proceeds from the IPO will be used to repay debt, infusion of funds into its subsidiaries, pursue inorganic growth through land acquisitions and other general corporate purposes.
The company’s sales (net of cancellation) have grown at a CAGR of 42.46% from FY21 to FY23. As of March 2023, it has sold 25,089 residential units with an average selling price of Rs 30.6 lakh per unit.
Signature Global’s consolidated loss narrowed to Rs 63.8 crore for the financial year ended March 31 from Rs 116 crore a year earlier. Revenue from operations surged more than 72% to Rs 1,554 crore.
ICICI Securities, Axis Capital and Kotak Mahindra Capital are the book-running lead managers for the IPO.
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