Mumbai-based real estate players Suraj Estate Developers, having major residential portfolio located in the markets of Mahim, Dadar, Prabhadevi and Parel markets has refiled its draft red herring prospectus (DRHP) with the markets regulator Securities and Exchange Board of India (SEBI) to raise funds through an initial public offering (IPO).
Earlier, in March 2022, the real estate developer had filed its Draft Red Herring Prospectus (DRHP).
The IPO consists of a fresh issue of up to Rs 400 crore, with each equity share having a face value of Rs 5.
The net proceeds to be raised from the fresh issue, the company proposes to utilise up to Rs 285 crore towards repayment/prepayment of the aggregate outstanding borrowings of the Company and its Subsidiaries, Accord Estates Private Limited and Iconic Property Developers Private Limited, up to Rs 35 crore for acquisition of land or land development rights besides general corporate purposes.
The Issue is being made through the Book Building Process, wherein not more than 50% of the Issue shall be available for allocation to Qualified Institutional Buyers, not less than 15% of the Issue shall be available for allocation to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation to Retail Individual Bidders.
Founded in 1986 by Rajan Meenathakonil Thomas, Suraj Estate Developers has been developing residential and commercial properties throughout South Central Mumbai. According to a company-commissioned Anarock report, it is one of the top ten developers as per supply (in number of units). Out of the top ten developers, it ranks first with 15.92% market share. Additionally, their dominance extends to absorption, where they lead with an impressive 16.99% market share.
Operating in both residential and commercial real estate, the firm caters to the discerning clientele across the "value luxury" and "luxury" segments, offering a diverse range of properties priced from ₹1.00 crore to ₹13.00 crore. It has constructed and sold built-to-suit corporate headquarters to institutional clients, which includes Saraswat Cooperative Bank Limited (Prabhadevi) and Clearing Corporation of India Limited (Dadar). The company also plans to foray into developing boutique office spaces on Tulsi Pipe Road, Mahim, to meet the growing demand for smaller independent offices in the commercial segment.
It has a longstanding presence of over thirty-six years in the real estate market in Mumbai. Its customer centric business model focuses on addressing customer requirements in various locations, ticket sizes and configurations.
As on May 31, 2023, the company has completed forty-two (42) projects, spanning a developed area of more than 1.05 million square feet in the South Central Mumbai Region. Additionally, they have eleven (11) ongoing projects, covering a developable area of 1.71 million square feet with saleable RERA carpet area of 497,774 square feet, and twenty-one (21) upcoming projects, expected to encompass an estimated carpet area of 843,192 square feet.
Positioned for future growth and expansion, the company holds certain strategic land parcels in Bandra (West) and Santacruz (East) for development. As of May 31, 2023, it possesses Land Reserves of 10,359.77 square meters, intending to capitalize on the entire FSI potential of more than index 2.0, subject to marketability and receipt of regulatory clearances. Moreover, they have additional land parcels spanning 9,631.35 square meters in Bandra (West), Mumbai, Maharashtra, and 728.42 square meters in Santacruz (East), Mumbai, Maharashtra, showcasing its commitment to strategic real estate investments and future projects.
Suraj Estate Developers clocked a profit of Rs 32.06 crore in the financial year FY23 against Rs 26.50 crore in the previous year, a rise of 20.98%. Revenue during the year FY23 increased significantly to Rs 305.74 crore from Rs 272.72 crore in the previous year, an increase of 12.11%, primarily due to increase in sales on account of new projects launch in value luxury segment namely Vitalis and Eterna in residential sector and additional floor transaction of commercial project namely Saraswat Bank (Prabhadevi) also increase in sales on account of increase in sale volume of its projects namely, Palette (Dadar), Ocean Star (Prabhadevi). Its profit margin increased to 10.49% in Fiscal 2023 from 9.72% in Fiscal 2022.
ITI Capital Limited and Anand Rathi Advisors Limited are the book running lead managers to the issue.