IPO listed on 24 Sep'24
Arkade Developers Ltd
Minimum Investment
₹ 14,080 / 110 shares
Grey market premium
₹ 61 (48% premium)
Issue price
₹ 128
Listing price
₹ 175
Listing gains
47 (37%)
Listing on
Sep 24, 2024
Our Verdict:
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- Arkade Developers Ltd (Arkade) has shown significant growth in FY24 following steady performances in FY22 and FY23, setting a positive trend for the future. With the capital influx post-IPO, the firm will be well-equipped to fuel its growth over the next 3-4 years.
- Moreover, Arkade boasts a robust pipeline of projects, with approximately 3.7 million sq. ft. of developable area across ongoing and forthcoming projects. The company operates with virtually no debt, having historically funded its activities primarily through promoter contributions and internal accruals rather than heavy leveraging.
- In terms of valuations, the IPO is attractively priced with a price-to-earnings (P/E) ratio of 16x based on FY24 earnings. A positive grey market premium (GMP) also suggests a solid market debut on the bourses.
- Considering the appealing valuation, proven execution capabilities, strong financials, and the growth potential within the Mumbai Metropolitan Region real estate market, investors may consider subscribing to this IPO from a medium-to-long term perspective.
About the company
Founded in
13 May'86
Managing director
Amit Jain
- Arkade is a real estate development company focused on the development of high-quality residential projects in Mumbai, Maharashtra. It specializes in both new project developments and the redevelopment of existing properties.
- Over the past 20 years, Arkade has successfully completed 28 projects, including 11 standalone projects, 9 joint developments, and 8 projects under proprietorship, collectively amounting to over 4.5 million square feet of development. During this time, the company has served over 4,000 customers.
STRENGTHS
- Market Position: Arkade is a leading developer in the Mumbai Metropolitan Region (MMR), ranking among the top 10 in supply within specific micro-markets in Maharashtra.
- Strong Financial Growth: Arkade has demonstrated significant growth, with its operational revenue and net profit achieving compounded annual growth rates (CAGRs) of 67% and 55%, respectively, from FY22 to FY24.
- Solid Return Metrics: Arkade’s financial efficiency is highlighted by impressive return metrics, with a Return on Equity (RoE) of 46.90% and a Return on Capital Employed (RoCE) of 47.34% in FY24, outperforming its industry peers.
- Robust Project Pipeline: As of June 30, 2024, Arkade has 6 ongoing projects with a developable area of 1.87 million square feet and 6 upcoming projects with 1.82 million square feet. These projects, strategically located in Mumbai’s prime western and eastern suburbs, are in various stages of development.
RISK FACTORS
- Regional Dependence: Arkade's operations are entirely based in the MMR region. Any developments negatively impacting the MMR real estate market could detrimentally affect the firm’s business, operational results, and financial standing.
- Cash Flow Issues: In FY23 and FY22, Arkade experienced negative cash flows from operations, primarily due to an increase in inventories, other financial assets, and adjustments for interest income. Continued negative cash flows may jeopardize the firm’s operational efficiency and financial outcomes.
- Legal Risks: Arkade is currently entangled in various legal disputes involving its directors, promoters, and subsidiaries. Adverse rulings in these legal matters could damage the company's reputation and financial stability.
Issue details
Issue type
Mainstream
Issue size
₹ 410 crore
Fresh Issue
₹ 410 crore
OFS
₹ -
Price range
₹ 121 - 128
Lot size
110 shares
Issue Objective
Arkade intends to use the net proceeds from the fresh issue for the following purposes:
- Partial financing of development expenses for ongoing projects;
- Funding the acquisition of land for future real estate projects; and
- General corporate purposes.
Dates
Bidding open
16 Sep'24
Bidding close
19 Sep'24
Allotment date
20 Sep'24
Refund date
23 Sep'24
Listing
24 Sep'24
IPO Reservations
Qualified institutional buyers
<50%
Non-institutional investors
>15%
Retail individual investors
>35%
Read the Offer Document
© 2025 by Liquide Solutions Private Limited, SEBI Registered Research Analyst (Registration number - INH000009816)
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