| Price | Lot Size | Issue Date | Issue Size |
|---|---|---|---|
| ₹ 121 to ₹ 128 | 110 | 16th Sep, 2024 – 19th Sep, 2024 | ₹410.00 Cr |
About Arkade Developers Limited IPO
Arkade Developers Limited, a prominent real estate development company, has been focusing on creating premium lifestyle residential properties in Mumbai, Maharashtra since 2017. The company operates in two main areas: the development and construction of new residential premises on acquired land, and the redevelopment of existing properties. As of June 30, 2024, Arkade Developers developed 2.20 million square feet of residential property, including areas developed through partnerships where they hold a majority stake. Currently, the company has six ongoing projects, of which three are new and three are redevelopment projects. The majority of its revenue comes from new projects since Fiscal 2023. Between 2017 and the first quarter of 2024, the company launched 1,220 residential units and sold 1,045 units across various markets in the Mumbai Metropolitan Region (MMR). From CY 2003 to March 2024, Arkade Developers has successfully completed the redevelopment of 10 projects in Mumbai’s western suburbs and one project in south-central Mumbai, totaling approximately 1,000,000 square feet. This achievement positions them as one of the significant players in the redevelopment sector in Mumbai’s western suburbs. Over the years, the company has developed projects across different price points. Currently, they are working on a project with unit prices ranging from Rs. 9.4 million to Rs. 62.5 million. Over the last two decades, they have completed 28 projects, generally financed through a combination of promoter equity and internal accruals. These include 11 projects completed independently, eight projects managed by their Promoter through his proprietorship, and 9 projects developed in partnership with other third parties. In total, these projects encompass more than 4.5 million square feet of development and have served approximately 4,000 customers. The company’s in-house team manages all aspects of project development, from conceptualization to completion, including land acquisition, legal matters, construction, and marketing and sales. They engage empaneled professionals on a project-by-project basis, considering factors such as project scale, availability, and cost.
Objective of the Arkade Developers Limited IPO
The company proposes to utilize the net proceeds towards the funding of the following objects:
- Funding a part of the costs to be incurred in the development of the ongoing projects (viz. Arkade Nest, Prachi CHSL and C-Unit) (funding development expenses); and
- Funding acquisition of yet-to-be identified land for real estate projects and general corporate purposes.
Rationale To Invest In Arkade Developers Limited IPO
Strong in-house resources ensure all-round and timely development of projects
Arkade Developers, a leading real estate development company in Mumbai, leverages its comprehensive in-house resources to manage projects from initiation to completion. This includes dedicated teams for legal, business development, purchases and contracts, and sales and marketing. The legal team ensures thorough due diligence for property acquisitions and skillfully negotiates redevelopment agreements, mitigating potential disputes. The sales team excels in advertising, networking with channel partners, and devising strategies to foster strong customer relationships, recognizing that satisfied customers are their best brand ambassadors. The marketing team conducts extensive market research and develops comprehensive strategies to achieve marketing objectives, identifying target markets and selecting effective channels such as digital advertising, social media, print media, and events. Their efficient use of traditional techniques and third-party resources like real estate-focused digital search platforms, ensures targeted outreach, resulting in increased property sales and sustained business growth. This strategic approach positions Arkade Developers for continued success and growth in the competitive real estate market, making it a compelling investment opportunity.
Leading market presence in lucrative and select micro markets of Mumbai
Arkade Developers is among the top 10 leading developers in select micro markets in the Mumbai region. They are highly rated primarily in the western suburbs in micro markets like Borivali West, Goregaon East, Santacruz West and Andheri East where they have a high percentage of total supply and total absorption cumulatively. Their strong market presence is highlighted by a high percentage of total supply and absorption in these areas. A major factor that contributes to their growth and success is their capability to consistently deliver projects on or ahead of schedule. The seamless coordination among their various teams involved ensures that they start a project only after receiving the necessary approvals required for it.
Valuation of Arkade Developers Limited IPO
Arkade Developers is a rapidly expanding real estate developer in the Mumbai region, specializing in both new projects and the redevelopment of existing properties. As one of the leading developers in Mumbai’s micro markets, the company presents a compelling investment opportunity. This success is attributed to its strong in-house team and commitment to the timely completion of projects. Mumbai, known for its expansive and high-value real estate market, saw significant growth in housing supply and absorption rates in the past, creating ample development opportunities. Arkade Developers has demonstrated substantial financial growth, with a revenue CAGR of 66.5% from FY22 to FY24. The company’s Profit After Tax (PAT) increased impressively from Rs. 508.4 million in FY23 to Rs. 1,228.1 million in FY24. Its Return on Capital Employed (ROCE) also rose significantly from 24.3% in FY23 to 47.3% in FY24, highlighting the company’s efficient capital utilization to drive growth and enhance profitability. Furthermore, Arkade Developers is working towards becoming debt-free, which enhances its attractiveness to investors by ensuring that funds are not diverted towards debt repayment. Looking ahead, the company plans to expand into the eastern region of the Mumbai Metropolitan Region (MMR), Maharashtra, with a mix of commercial and residential developments. The current issue is priced at a P/E ratio of 15.8x on the upper price band based on FY24 earnings, which is relatively lower compared to its peers. Therefore, we recommend a SUBSCRIBE rating for this issue with a medium to long-term investment perspective.
What is the Arkade Developers Limited IPO?
Arkade Developers IPO is a book built issue of Rs 410.00 crores. The issue is entirely a fresh issue of 3.2 crore shares. Arkade Developers IPO opens for subscription on September 16, 2024 and closes on September 19, 2024. The allotment for the Arkade Developers IPO is expected to be finalized on Friday, September 20, 2024. Arkade Developers IPO will list on BSE, NSE with tentative listing date fixed as Tuesday, September 24, 2024. Login to your account now.
How to apply for the Arkade Developers Limited IPO through StoxBox?
To apply for the Arkade Developers Limited IPO through StoxBox one can apply from the website and also from the app. Click here
When will the Arkade Developers Limited IPO open?
Arkade Developers Limited IPO is opening on 16th September 2024.Apply Now
What is the lot size of the Arkade Developers Limited IPO?
The Lot Size of Arkade Developers Limited IPO is 110 equity shares. Login to your account now
When is the Arkade Developers Limited IPO allotment date?
The allotment Date for Arkade Developers Limited IPO is 20th September 2024. Login to your account now.
When is the Arkade Developers Limited IPO listing date?
The listing Date for Arkade Developers Limited IPO is 24th September 2024. Login to your account now
What is the minimum investment required for the Arkade Developers Limited IPO?
In the Retail segment the minimum investment required is Rs. 14,080. Login to your account now
What is the maximum investment allowed for the Arkade Developers Limited IPO?
In the Retail segment the maximum investment requirement is Rs. 197,120. Login to your account now
What are the risks associated with investing in the Arkade Developers Limited IPO?
- The company’s inability to identify suitable redevelopment projects or acquire appropriate land for their new projects may adversely affect their business and growth.
- The company plans to allocate a portion of the net proceeds for land acquisition, though there is no guarantee of the land’s viability or the project’s profitability.
- Arkade Developers business is entirely focused on the Mumbai Metropolitan Region which means that any negative impact on the local real estate market could severely affect their business performance, operational results, and financial health.
When will the Arkade Developers Limited IPO shares be credited to my Demat account?
The Arkade Developers Limited IPO be credited to the account on allotment date which is 23rd September 2024. Login to your account now
Where can I find the Arkade Developers Limited IPO prospectus?
The prospectus of Arkade Developers Limited IPO prospectus can be find on the website of SEBI, NSE and BSE
What are the important dates related to Arkade Developers Limited IPO?
| IPO Open Date | Monday, September 16, 2024 |
| IPO Close Date | Thursday, September 19, 2024 |
| Basis of Allotment | Friday, September 20, 2024 |
| Initiation of Refunds | Monday, September 23, 2024 |
| Credit of Shares to Demat | Monday, September 23, 2024 |
| Listing Date | Tuesday, September 24, 2024 |
| Cut-off time for UPI mandate confirmation | 5 PM on September 19, 2024 |
