Casagrand Premier Builder, a well-known real estate developer, has filed draft papers with the Securities and Exchange Board of India (SEBI) to raise ₹1,100 crore through an Initial Public Offering (IPO). The company is looking to issue fresh equity shares worth ₹1,000 crore, while the remaining ₹100 crore will come from an Offer for Sale (OFS) by existing shareholders.
Breakdown of Casagrand Premier’s IPO and Offer for Sale
Under the Offer for Sale, the company’s promoter, Arun MN, will sell shares worth ₹50 crore, while Casagrand Luxor will also sell shares worth ₹50 crore. In addition to this, the company has the option to raise ₹200 crore through a preferential offer before filing the red herring prospectus. If this pre-IPO placement is successful, the size of the fresh issue will be reduced accordingly.
How the IPO Funds Will Be Used
Casagrand Premier Builder plans to use ₹150 crore of the IPO proceeds to reduce its existing debt. An additional ₹650 crore will be used to clear the debts of its subsidiary companies. The remaining funds will be allocated for general corporate purposes. As of June 2024, the company’s total outstanding debt stood at ₹4,020.7 crore.
The company has appointed JM Financial and Motilal Oswal Investment Advisors as the lead managers for the issue, making sure the process runs smoothly and effectively.
Casagrand Premier’s Growth and Market Presence
Founded in 2003, Casagrand Premier Builder is known for its strong presence in the residential real estate market, particularly in Chennai. The company holds around 24% market share in terms of launches and 20% in demand between January 2017 and March 2024. Beyond Chennai, the company also operates in other major cities, including Bengaluru, Hyderabad, and Coimbatore.
As of May 2024, Casagrand has completed 101 projects covering a saleable area of 21.45 million square feet. Additionally, the company has 42 ongoing projects and 17 upcoming projects, with a combined saleable area of 46.75 million square feet.
Financial Performance of Casagrand Premier
Casagrand Premier Builder has shown a steady financial performance. The company reported a net profit of ₹256.9 crore for the financial year ending March 2024, a 13.6% increase from the previous year’s net profit of ₹226.1 crore. Revenue for FY24 stood at ₹2,614 crore, reflecting a growth of 4.9% compared to the prior year.
However, despite the growth in revenue and profit, the company saw a slight decline in its EBITDA margins. While EBITDA grew by 3.9% to ₹341.2 crore, the margin fell by 13 basis points to 13.05%.
Competing with Top Real Estate Players
Casagrand Premier Builder operates in a highly competitive market, competing with other South India-based real estate companies like Prestige Estates Projects, Sobha, Shriram Properties, Keystone Realtors, and Brigade Enterprises. Despite the competition, Casagrand has established itself as a major player in the residential real estate sector.
This upcoming IPO marks a significant step for Casagrand Premier as it seeks to strengthen its financial position and continue its growth in the Indian real estate market.
