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Macrotech Developers IPO fully subscribed on final day

Macrotech Developers maiden public offer has been fully subscribed on April 9, the last day of bidding. The issue has drawn bids for 3.74 crore equity shares against the IPO size of 3.64 crore equity shares, the subscription data present on the exchanges revealed.

The reserved portion of QIBs has been subscribed 2.25 times so far.

The portion kept aside for non-institutional investors has received a subscription of 1.08 times and that of retail investors 34 percent. The portion of the company’s employees was subscribed 15 percent. The company has reserved Rs 30 crore worth of equity shares for its employees.

Macrotech Developers had earlier failed twice in its attempts to raise funds via IPO in 2009 and 2018 as a result of poor market conditions. However, experts believe that the third time may be fruitful because of the availability of ample liquidity.

Yash Gupta Equity Research Associate at Angel Broking said, “In the previous two attempts, Macrotech Developers failed to get its stock listed. Both the times the company took approval from Sebi but did not file red herring prospectus (RHP), this time things look different.” 

“We expect this time the company will be able to get listed on the stock exchange, as there is a good response from anchor investors to the IPO, and also a good response from retail and institutional investors on day 1,” he added.

Most of the IPOs launched in 2021 have received a good response from retail investors on the first day of their bidding.

Mumbai-based Macrotech Developers is looking to raise Rs 2,500 crore through its public issue. Of this amount, Rs 741 crore has already been raised from anchor investors on April 6. The company will use net proceeds from its issue for paying off debt and acquisition of land or land acquisition rights.

“The company has a strong brand in affordable and mid-income housing projects but is not able to deliver the growth in sales and free cash flow in the last couple of years. The company has posted sales degrowth of 68 percent in 9MFY21 and reported a negative profit after tax of Rs 265 crore. Given weak revenue growth in the past and leverage balance sheet we assign a “neutral” rating to the IPO,” Yash Gupta said.

“The market has been uncertain due to the second wave of Covid. Despite this, the Macrotech Developers IPO has received a good response from the investors.”

Shishir Gupta, Founder and CEO, StartupLanes

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