Shriram Properties to launch up to ₹700 cr IPO in December

Shriram Properties Ltd is planning a ₹600-700 crore public listing in the second week of December, two people familiar with the matter said, as it seeks to capitalize on a rebound in demand for residential properties and heightened investor interest in the segment.

The Bengaluru-based company, which focuses on mid-income housing projects in south India, filed draft papers with the Securities and Exchange Board of India (Sebi) to raise up to ₹800 crore through an initial public offering (IPO) in April. It received the market regulator’s nod in June.

Shriram Properties is now in the process of filing an updated draft prospectus with Sebi, one of the two people said requesting anonymity. Once approved, the company will proceed with the share sale, the person said.

“Shriram Properties intends to give partial exits to its four existing investors—TPG Capital, Starwood Capital, Tata Capital and Walton Street Capital and Starwood Capital. Part of the proceeds will be used to pare debt,” the second person said.

The four investors hold around 58% in Shriram Properties, part of India’s Shriram Group. The person did not say how much stake would be sold by the four investors in the IPO.

“The company has got good response from potential anchor investors, mainly domestic mutual funds and foreign institutional investors,” the person said.

A spokesperson for Shriram Properties did not respond to queries.

This would be the second public listing of a property firm after Macrotech Developers Ltd’s ₹2,500 crore IPO in April.

Property analysts said investor interest in the residential sector has recovered significantly. Lower loan rates, people’s preference for bigger homes during the pandemic and change in consumer preference to own a property has spurred demand.

“Institutional investors have stayed away from the housing sector for many years now. But that changed during the pandemic, and we are seeing a steady recovery in homebuyers’ sentiment as well as investors. If sales and project launches continue the way they are currently, the sector will see a comeback of investors too,” said a property consultant requesting anonymity.

In an indication of strong investor interest, Mumbai-based Macrotech Developers, which uses the Lodha brand name, raised ₹4,000 crore in November through a qualified institutional placement (QIP) from foreign and domestic institutional investors. The QIP, the largest so far by a property developer in India, came just six months after Macrotech’s public listing. While Macrotech garners nearly half its sales bookings from affordable and mid-segment projects, Shriram also focuses on budget housing. Analysts said investors are bullish on this segment because it accounts for a sizeable share of total residential sales.

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