Rustomjee group firm Keystone Realtors files IPO papers with SEBI; plans to raise Rs 850-cr via public issue

Keystone Realtors, Rustomjee Group’s company, has filed a draft red herring prospectus with capital market regulator SEBI to raise Rs 850 crore through an initial public offering (IPO). The issue consists of fresh issue of equity shares aggregating up to Rs 700 crore and an offer-for-sale (OFS) worth Rs 150 crore by promoters. The OFS comprises sale of equity shares worth up to Rs 75 crore by Boman Rustom Irani and stocks to the tune of Rs 37.5 crore each by Percy Sorabji Chowdhry and Chandresh Dinesh Mehta.

Keystone Realtors has proposed to utilise the net proceeds towards payment of debt, funding acquisition of future real estate projects and general corporate purposes. The book running lead managers to the issue are Axis Capital, and Credit Suisse Securities (India) Pvt Ltd. Link Intime India will be the registrar to the issue. Upon successful listing of the stocks on BSE and NSE, Keystone Realtors will join the likes of Macrotech Developers, Godrej Properties, Oberoi Realty, and Sunteck Realty. The average return on net worth for nine months ended 31st December stood at 10.94, while the average industry P/E ratio was at 428.93x.

The company, in its DRHP, said that structural changes of RERA and GST have helped the sector to gain more maturity and trust from the market. Keystones Realtors commands a market share of 28% in Khar, 23% market in Juhu, 11% in Bandra East, 14% in Virar, 3% in Thane and 5% in Bhandup in terms of absorption (in units) from 2017 to 2021, according to Anarock report. The company has strategic investors such as Lipalton Pte. Ltd. (a wholly-owned subsidiary of Keppel Land Limited) for Rustomjee Urbania, an integrated township located in Thane. 

As of March 2022, Keystone Realtors had 32 completed projects, 12 ongoing projects and 19 forthcoming projects across the Mumbai Metropolitan Region (MMR) that includes a comprehensive range of projects under the affordable, mid and mass, aspirational, premium and super premium categories, all under their Rustomjee brand.

Also, the Mumbai-based real estate developer has developed 20.05 million square feet of high-value and affordable residential buildings, premium gated estates, townships, corporate parks, retail spaces, schools, iconic landmarks and various other real estate projects as of March 2022.

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