Rustomjee Group firm Keystone Realtors set to open ₹635-crore IPO on Monday

• Keystone Realtors plans to raise ₹560 crore through a fresh issue of shares through the IPO along with an offer for sale of ₹75 crore.
• The price band of the IPO is set at ₹514-541 a share.
• IPO proceeds will be utilised towards debt repayment, funding acquisition of future real estate projects, and general corporate purposes.

The initial public offering (IPO) of Keystone Realtors, which operates under the brand ‘Rustomjee’, is set to open on Monday, November 14 and close on November 16. This will be the first real estate company to raise money from primary markets this year.

Keystone Realtors plans to raise ₹635 crore through the IPO – ₹560 crore of it through a fresh issue of shares and ₹75 crore through an offer for sale by promoters and existing shareholders.

The price band of the IPO is set at ₹514-541 a share.

IPO proceeds will be utilised towards debt repayment, funding acquisition of future real estate projects, and general corporate purposes.

The company is in the business of real estate construction, development and other related activities in India. As of June 30, 2022, it had 12 ongoing projects and 21 forthcoming projects across the Mumbai Metropolitan Region (MMR), under affordable, mid and mass, and some premium categories.

As of June 30, 2022, it had developed 32 projects, over 280 buildings, 20.22 million square feet area (including infrastructure) and homes for over 14,000 families.

Further, total borrowings of the company increased to ₹1,557 crore in FY22 from ₹1,220 crore in FY21. The company added that the development of real estate projects involved significant expenses, a large part of it funded through financing from banks and other financial institutions.

The company mentioned in its RHP that it may face issues in raising additional loans. “Moreover, certain of our loan documents contain provisions that may limit our ability to incur future debt, make certain payments or take certain actions,” it said.

In FY22, the real estate company’s net profits slumped 41% from a year earlier to ₹136 crore while revenue rose 50% to ₹1,269 crore.

During Covid-19, its business operations were significantly disrupted due to the lockdowns – with delays in construction, inability to meet timelines and liquidity constraints.“The Covid-19 pandemic has had, and may continue to have, repercussions across local, national and global economies and financial markets. Various governments and organisations have revised GDP growth forecasts in response to the economic slowdown caused by the spread of the Covid-19 pandemic, and the Covid-19 pandemic may result in a prolonged global economic crisis or recession,” said the company in its red herring prospectus (RHP).

Lodha group company Macrotech Developers, Godrej Properties are among the company’s competitors and most of these have delivered poor stock market returns in 2022.

(RHP and BSE)

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