Macrotech to cut debt by 24 per cent to Rs 12,700 crore post-IPO

Mumbai-based Macrotech Developers has sold properties worth Rs 50,000 crore in the last seven years (FY14 to FY20), making it the largest developer in terms of annual sales bookings, its Managing Director Abhishek Lodha told reporters in a virtual press conference.

The company will launch its IPO on April 7 to raise Rs 2,500 crore through a fresh issue of shares. The issue will close on April 9. The price band is Rs 483-486 per share. From IPO proceeds, Macrotech mainly proposes to reduce debt by up to Rs 1,500 crore and acquire land or land developmental rights aggregating up to Rs 375 crore.

Abhishek expressed confidence that its IPO will be successful given the response that the company has been receiving from domestic and global investors in pre-IPO roadshows. This is the third attempt by Lodha Developers to launch a public issue and list its shares on the stock exchanges. In 2009 and 2018, the company had filed IPO documents and also got Sebi approvals but did not hit the capital market as market conditions were not conducive. This is the third attempt by Lodha Developers to launch a public issue and list its shares on the stock exchanges.

Abhishek said the company, which has a presence in the London property market with the development of two properties, will now focus on India business for growth. Macrotech will continue to focus on Mumbai Metropolitan Region (MMR) and Pune markets and that too in affordable and mid-income housing. “In India, we are the largest developer in terms of sales bookings. In last seven years, we have sold properties worth over Rs 50,000 crore,” he added.

He said the company’s net debt for India business is Rs 16,700 crore as of December 31, 2020. “Our debt will come down to Rs 12,700 crore after the IPO”. Abhishek said the company has 55 lakh of unsold housing inventories and also huge receivables from existing customers.

The company will also monetise commercial assets worth Rs 1,500 crore, he said, adding that the industrial park project in MMR will also be monetised. Hailing the Maharashtra government’s decision to go for semi lockdown to control the current wave of COVID-19 pandemic, Abhishek said the move will have a minimal impact on demand for large developers.

He also said the company’s financial performance has been impacted in the last fiscal as both construction and sales activities were adversely impacted during April-September 2020 because of the pandemic. Abhishek said the financial performance will be back to normal from the current fiscal.

Macrotech Developers revenue from operations stood at Rs 9,580 crore in the 2019-20 fiscal. In the first nine months of the last fiscal, revenue stood at Rs 2,920 crore. The company posted a profit of Rs 1,210 crore in 2019-20 but has suffered a loss of Rs 260 crore in the April-December period of last fiscal due to the pandemic.

Macrotech Developers sales booking stood at about Rs 6,600 crore in 2019-20. In the first nine months of last fiscal year, sales bookings stood at nearly Rs 3,400 crore, of which around Rs 2,500 crore was achieved in the October-December quarter. Lodha Developers, now renamed as Macrotech Developers, was founded in 1995 by Mangal Prabhat Lodha.