Signature Global IPO Day 1: The initial public offering of realty firm Signature Global opened for public subscription today, Wednesday. The Rs 730-crore IPO, whose price band has been fixed at Rs 366-385 per share, will close on September 22. On the first day of bidding, the IPO has been subscribed 6 per cent so far, receiving bids for 6,34,296 shares as against 1,12,43,196 shares on offer.
The category for retail individual investors (RIIs) was subscribed 27 per cent while the non-institutional investors category received bids for just 3 per cent of the quota. And, the qualified institutional buyers (QIBs) portion has received bids for 2,622 shares as against 62,56,858 shares under the quota.
The Signature Global IPO’s allotment will take place on September 27. The company will make its stock market debut on October 4, with share listing on BSE and NSE.
Signature Global IPO GMP
According to market observers, Signature Global is currently trading Rs 34 higher in the grey market. The Rs 34 grey market premium or GMP is about 8.83 per cent higher than its upper issue price of Rs 385 per share. This means the grey market is expecting an 8.83 per cent listing gain from the public issue.
‘Grey market premium’ indicates investors’ readiness to pay more than the issue price.
Signature Global IPO: Should You Subscribe?
On the IPO rating, brokerage houses including HDFC Securities, Sushil Finance, Ventura Securities and Anand Rathi have remained neutral.
“The issue is priced at a P/BV of 101.05 based on its NAV of Rs 3.81. The company has posted losses for the last three fiscals. Keeping in mind the real estate industry and fluctuating demand style is a concern. Looking at both opportunities and challenges faced by the company and keeping the further performance of the company, Cautious investing by cash surplus investors as and when the performance turns around,” Sushil Finance said in a note.
Anand Rathi in its note said the choice of micro-markets and its focus on affordable housing make Signature Global stand out.
“On its rapid scale-up of operations in the NCR, its keen focus on value homes (conforming to demand from the salaried class) and select commercial projects, it has emerged as a real estate supplier of choice in its chosen micro-markets. On its strong project pipeline, continued focus on timely project execution (established reputation, in house execution abilities) and a supportive demand environment, it intends to further strengthen its leading position. Its gradual expansion into newer micro markets within NCR with traits similar to its existing focus areas will open up near- to mid-term opportunities,” it said.
About Signature Global IPO
The proceeds of the IPO will be used mainly for debt reduction and business expansion. The public issue will close on September 22. The price band has been fixed at Rs 366-385 per share.
The total size of the IPO is up to Rs 730 crore, comprising a fresh issue of shares worth up to Rs 603 crore and an offer for sale (OFS) of up to Rs 127 crore.
Delhi-NCR-based Signature Global has already raised Rs 318.5 crore from anchor investors, including Nomura.
In a regulatory filing late Monday, Signature Global informed that under the Anchor Investors (AIs) portion in the public issue, 82,72,700 equity shares have been subscribed at Rs 385 per equity share.
The Nomura Trust and Banking Co Ltd bought a maximum of 18,70,094 shares.
Kotak Mahindra Trustee Co Ltd, Kotak India EoQ Contra Fund, Quant Mutual Fund, Nippon India Equity Opportunities AIF, Bandhan Core Equity Fund, Morgan Stanley Asia, Societe Generale, BNP Paribas Arbitrage and Goldman Sachs Singapore are among other anchor investors.
Signature Global- backed by HDFC Capital and IFC — had in July last year filed the draft red herring prospectus (DRHP) with capital markets regulator Sebi to launch its IPO.
According to the red herring prospectus (RHP) filed recently, the bulk of the proceeds will be used to reduce debt.
“Our net debt stood at around Rs 1,100 crore at the end of the last fiscal year. We propose to utilise Rs 432 crore for debt reduction,” Signature Global Chairman Pradeep Aggarwal told reporters recently.
The balance fund will be used for inorganic growth through land acquisitions and general corporate purposes.
At present, the promoter group holds a 78.35 per cent stake in the company. Their shareholding will come down to around 69-70 per cent in the company post-listing.
Through OFS, International Finance Corporation is selling its shares partly. At present, IFC holds a 5.38 per cent stake in the company.
On the operational front, Signature Global achieved 32 per cent growth in its sales bookings at Rs 3,430.58 crore in the last fiscal on strong housing demand.
Signature Global, which focuses on the affordable and mid-income housing segment, had clocked Rs 2,590 crore worth of sales bookings in the preceding fiscal.
Signature Global’s collection from customers rose to Rs 1,920 crore last fiscal from Rs 1,282.14 crore a year ago.
It launched 6.21 million square feet area during 2022-23 against 4.21 million square feet in the year-ago period.
Signature Global delivered 4.01 million square feet area last fiscal, up from 3.03 million square feet in the preceding fiscal.
As per the RHP, the company’s total income rose to Rs 1,585.87 crore last fiscal from Rs 939.60 crore a year ago.
The net loss has narrowed to Rs 63.71 crore in 2022-23 from Rs 115.5 crore in 2021-22.
Signature Global commenced operations in 2014.
As of March 31, 2023, it has sold 27,965 residential and commercial units, all within the Delhi NCR region, with an aggregate saleable area of 18.90 million square feet.
(With Inputs From PTI)