Arkade Developers IPO: A Detailed Analysis

Arkade Developers, a name synonymous with quality real estate in Mumbai, is all set to make its market debut with an Initial Public Offering (IPO). This exciting development presents an opportunity for investors to be a part of a thriving real estate company. In this blog post, we’ll delve into the details of the Arkade Developers IPO, exploring its investment highlights, potential risks, and what it means for investors.

Check more details about Arkade Developers.

Table of Contents

IPO Details

The Arkade Developers IPO is scheduled to open for subscription from September 16 to 19, 2024. Investors can bid for shares within a price band of ₹121 to ₹128 per share. The company aims to raise a total of ₹410 crore through this offering, which is expected to list on the stock exchanges on September 24, 2024.

The Grey Market Premium (GMP) for Arkade Developers IPO has shown significant interest, with reports indicating a premium of around ₹80 over the upper end of the IPO price band (₹128). This translates to a 62.5% premium, suggesting strong market expectations for a positive listing gain. Here’s a quick summary:

IPO Price Band: ₹121 – ₹128 per share.
GMP: ₹80, indicating a 62.5% premium over ₹128.
Expected Listing Price: Based on this GMP, the shares might list around ₹208, if the market sentiment holds.

This GMP reflects the current sentiment and speculative pricing in the grey market, which often but not always, correlates with the actual listing performance.

Here’s a detailed tabular representation of the Arkade Developers IPO based on the information provided:

Aspect	Details
IPO Open Date	September 16, 2024
IPO Close Date	September 19, 2024
Price Band	₹121 – ₹128 per share
Issue Size	₹410 Crores (entirely fresh issue)
Lot Size	110 Shares
Minimum Investment	₹14,080
Allotment Date	September 20, 2024
Refund Initiation	September 23, 2024
Credit of Shares	September 23, 2024
Listing Date	September 24, 2024
Book Running Lead Manager	Unistone Capital Pvt Ltd
Registrar	Bigshare Services Pvt Ltd
Retail Quota	35%
QIB Quota	50%
HNI Quota	15%
Pre-IPO EPS	₹8.08 (based on FY 2024 earnings)
P/E Ratio	15.84x (based on the upper price band of ₹128)
Revenue FY 2024	₹635.71 Crores
Profit FY 2024	₹122.81 Crores
Market Cap Post Issue	₹2,376 Crores (approx.)

This table encapsulates key details about the Arkade Developers IPO, providing a comprehensive overview for potential investors.

A Closer Look at Arkade Developers

Arkade Developers has carved a niche for itself in the Mumbai real estate market, specializing in affordable and mid-segment housing projects. With a proven track record of delivering quality homes, the company has earned a reputation for its commitment to customer satisfaction and timely project completion.

Here’s the Arkade Developers IPO Timeline in tabular form based on the information provided:

Event	Date	Details
IPO Open Date	September 16, 2024	Start of the IPO subscription period.
IPO Close Date	September 19, 2024	End of the IPO subscription period.
Allotment Date	September 20, 2024	Finalization of share allotment to applicants.
Refund Initiation	September 23, 2024	Refunds processed for those not allotted shares.
Credit of Shares	September 23, 2024	Shares credited to the demat accounts of successful applicants.
Listing Date	September 24, 2024	Shares begin trading on the stock exchange.
Price Band	–	₹121 – ₹128 per share
Issue Size	–	₹410 Crores (entirely fresh issue)
Lot Size	–	110 Shares
Minimum Investment	–	₹14,080 (based on the upper price band)

This table outlines the key dates and financial details for the Arkade Developers IPO, providing a clear timeline for investors to follow.

Why Invest in Arkade Developers?

Strong Growth Prospects: Arkade Developers has consistently demonstrated robust growth in its revenue and profitability, driven by the increasing demand for affordable housing in the Mumbai Metropolitan Region (MMR).
Experienced Leadership: The company’s management team boasts a wealth of experience in the real estate industry, ensuring strategic decision-making and efficient project execution.
Strategic Locations: Arkade Developers’ projects are strategically located in prime areas within the MMR, providing convenient access to essential amenities and infrastructure.

Here’s the financial information for Arkade Developers Limited in a tabular format:

Financial Metric	31 Mar 2024	31 Mar 2023	31 Mar 2022
Assets (₹ Crore)	575.01	555.41	369.97
Revenue (₹ Crore)	635.71	224.01	237.18
Profit After Tax (₹ Crore)	122.81	50.77	50.84
Net Worth (₹ Crore)	323.4	200.32	149.5
Reserves and Surplus (₹ Crore)	171.4	198.32	147.49
Total Borrowing (₹ Crore)	69.41	149	64.41

Key Financial Insights:

Revenue Growth: A remarkable 184% increase in revenue from FY 2023 to FY 2024, showcasing strong business growth.
Profit Surge: Profit After Tax (PAT) grew by 142%, indicating significant operational efficiency or cost management improvements.
Asset Expansion: Assets increased slightly from FY 2023 to FY 2024, suggesting investments in infrastructure or expansion.
Net Worth: Reflects a substantial rise, indicating retained earnings and overall financial health improvement.
Reserves and Surplus: A decrease from FY 2023 to FY 2024 might indicate utilization of reserves for growth initiatives or dividends.
Borrowings: A significant reduction in total borrowings, which could imply better financial management or debt repayment.

This table provides a snapshot of Arkade Developers Limited’s financial performance over the last three fiscal years, highlighting its growth trajectory and financial stability.

Arkade Developers IPO GMP and Subscription

Based on the information available up to September 18, 2024, here’s an overview of the Arkade Developers IPO regarding its Grey Market Premium (GMP) and subscription status:

Grey Market Premium (GMP): The GMP for Arkade Developers IPO has been reported around ₹85 to ₹86, indicating a significant premium over the issue price. This suggests strong investor interest, with expectations of a listing gain around 66% to 67% from the upper price band of ₹128.
Subscription Status:
- By the third day of its subscription, the IPO was subscribed over 31 times, showcasing robust investor demand.
- The retail portion saw particularly high interest, being subscribed over 35 times, indicating strong retail investor confidence or speculation in the IPO’s success.
Market Sentiment: Posts on platforms like X reflect a bullish sentiment towards the IPO, with discussions around expected listing gains and subscription multiples highlighting the market’s enthusiasm. The high subscription rate, especially in the retail category, underscores the IPO’s appeal among individual investors.
Investment Consideration: Given the GMP and subscription figures, there’s clear market optimism about Arkade Developers’ listing performance. However, potential investors should consider the inherent risks of IPOs, including market volatility, real estate sector dynamics, and whether the GMP reflects realistic future performance or speculative bubble.

Potential Risks and Challenges

While Arkade Developers presents a promising investment opportunity, it’s essential to consider the potential risks involved. The real estate industry is highly competitive, and the company faces competition from other established players. Additionally, regulatory changes and economic fluctuations could impact the company’s operations and profitability.

Conclusion

The Arkade Developers IPO offers investors a chance to participate in the growth of a well-established real estate company with a strong focus on affordable housing. However, it’s crucial to conduct thorough research and consider the risks before making an investment decision. If you’re interested in exploring this investment opportunity, consider consulting with a financial advisor to get personalized advice.

Remember, investing involves risks, and past performance is not indicative of future results.