Puranik Builders IPO - 7 Things to Know

Puranik Builders, which had filed its DRHP with SEBI in September this year, has got approval for its proposed IPO. Incidentally, this is the third attempt made by the company to tap the IPO market. Here is a gist of the Puranik Builders IPO.
 

Seven interesting facts to know about Puranik Builders IPO

1) This is not the first time that Puranik Builders is filing for its IPO. It had earlier filed for its proposed IPO in 2018 but had shelved the IPO plans.

Subsequently, Puranik Builders had again filed for IPO in late 2019, but due to the stress created by COVID, it had to abandon its IPO plans. This is the third IPO attempt by Puranik Builders.

2) The IPO will comprise of Rs.510 crore of fresh issue and the company will also offer 945,000 shares under the offer for sale.

The two promoters, Ravindra Puranik and Gopal Puranik, will offer 472,500 shares each in the OFS. The total size of the IPO will depend on the pricing of the IPO.

3) The fresh issue proceeds of Rs.510 crore will be used to reduce the debt of the company and also for general working capital and other corporate purposes.

The company has a high degree of leverage which is impacting its solvency ratios and hence debt reduction would be value accretive for Puranik Builders.

4) The company basically develops and sells mid-range projects in the Mumbai Metropolitan Region (MMR) and the Pune Metropolitan Region (PMR).

Puranik Builders has been active in the real estate business in the MMR and PMR region for the last 31 years. Its focus remains on affordable residential housing.

5) For FY21, the company sales fell from Rs.730 crore to Rs.513 crore while the profits fell from Rs.51 crore to Rs.36 crore.

This fall was largely attributed to the cessation of construction activity for several months due to the pandemic as well as higher stress on the disposable income of people.

6) However, Puranik Builders hopes to build on the traction that realty companies are seeing in the last few quarters in terms of a spike in bookings. Some of the major projects underway include Puraniks Tokyo Bay, Puranik Hometown, Puraniks City Reserva, Puranik Rumah Bali, Puranik Capitol, Puranik Elito Grand Central etc.

7) Elara Capital and Yes Securities will be the book running lead managers for Puranik Builders. Puranik Builders will also consider a Rs.150 crore pre-IPO placement of shares via private placement with select institutions, in which case the size of the IPO would be reduced proportionately.

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