Lodha Developers files papers for ₹2,500 crore IPO — will it be a third time charm?

• This is the third time the developer is proposing to take the company public after two failed attempts in 2009 and 2018 in the backdrop of unfavourable market conditions.
• The reports indicated that the company took the decision to go public after a recent spurt in residential sales and improved investor sentiments.
• The company is known for its prominent luxury offerings such as the Trump Towers in Mumbai and Grosvenor Square in London.
• Check out the latest news and updates on Business Insider.

One of India's largest real estate players Macrotech Developers — formerly known as Lodha Developers — has filed a draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) to raise around ₹2,500 crore through an initial public offering, according to news reports.

The Mumbai-based company is known for its prominent luxury offerings such as the Trump Towers in Mumbai and Grosvenor Square in London. For the proposed share sale, the company is looking to dilute at least a 10% stake.

In 2019, the Lodha Developers changed its name to Macrotech Developers. However, the company said it will continue using the brand name ‘Lodha’ for selling and or leasing its property.

The news reports indicated that the company took the decision to go public after a recent spurt in residential sales and improved investor sentiments. This is the third time the developer is proposing to take the company public after two failed attempts in 2009 and 2018 in the backdrop of unfavourable market conditions.

The proposed amount of ₹2,500 crore is more than half of what the company had planned to raise earlier. In April 2018, Lodha Group had approached SEBI to raise around ₹5,500 crore through an initial public offering (IPO) and had received the regulator's nod to launch the IPO, but the company backed off citing challenging times for the realty sector.

The company first attempted to list its shares on the bourses in 2009 to raise about ₹2,800 crore. The company also received SEBI's nod in early 2010, but later dropped the plan due to unfavourable market conditions caused by the global financial crisis of 2008.

The reports indicated that the company has roped in investment banking firms such as Axis Capital, ICICI Securities, Edelweiss Securities, IIFL Securities, SBI Capital, JM Financial, Yes Securities, Bank of Baroda Capital, and JP Morgan as advisors for its IPO. “The Lodha IPO is majorly a primary issue of shares and the proceeds are likely to be used for debt reduction, land acquisition and new projects,” according to a Moneycontrol report.

The stars are aligning perfectly for Lodha Group

The company is coming up with IPO plans just days after the Finance Minister Nirmala Sitharaman at the annual budget added thrust for affordable housing. Sitharaman extended the exemption for affordable housing until March 2022, making the section of the real estate sector quite attractive.

The recent Economic Survey by Krishnamurthy Venkata Subramanian, India’s chief economic advisor, showed that the COVID-19 pandemic had hit the residential property market during the first quarter. However, the sales have now improved dramatically in the affordable homes segment since July.

According to the RBI data, the year-on-year growth in the all-India House Price Index (HPI) continued to be moderate. It stood at 1.1% in the second quarter.

The stocks of its listed peers such as DLF, Godrej Properties, and others have seen a favourable investors interest in the past three months.


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