Today is a crucial day in the market for a leading company in the real estate sector. Kaltaru Limited's Initial Public Offering (IPO) of ₹1590 crore is set to be listed on the stock exchange on July 1st. Investors are watching closely to see if they will profit on the first day, or if there will be a setback during the listing.
IPO Response
Kaltaru Limited's IPO opened on June 24th and closed on June 26th. This three-day issue received a total subscription of 2.31 times, which can be considered average.
- Retail investors' portion was subscribed 1.43 times.
- Non-Institutional Investors (NII) bid 1.40 times.
- While Qualified Institutional Buyers (QIB) subscribed up to 3.12 times.
These figures clearly indicate that institutional investors showed slightly more confidence, but retail and NII participation remained relatively limited.
GMP Shifts Sentiment, Signals Weakening
Before the IPO, the unlisted market, or grey market, had a somewhat positive environment for Kaltaru. The Grey Market Premium (GMP) was recorded at ₹11 up to four days before the issue opened.
However, as the issue date neared, the GMP declined.
- On the day the issue opened, the GMP dropped to ₹9.
- By the time it closed, it had fallen further to ₹3.
- And now, a day before the listing, it has become zero.
This means there is no premium left, suggesting that today's listing could be flat or at a discount.
What the Price Band and Potential Listing Price Indicate
The company had set a price band of ₹387 to ₹414 per share. Shares were allotted at the maximum price, ₹414. With the current GMP at zero, market experts anticipate that Kaltaru Limited's shares may list today at around ₹414, meaning neither profit nor significant loss.
Company Background and Business Strengths
Kaltaru Limited was established in 1988 and is part of the Kaltaru Group, one of the leading infrastructure and EPC (Engineering, Procurement and Construction) firms in the country.
To date, Kaltaru has developed projects over 25.9 million square feet, including major cities like Mumbai, Pune, Thane, and Hyderabad. The company's focus has been particularly on high-end and luxury residential projects.
As of December 2024, Kaltaru has:
- 25 ongoing projects
- 6 upcoming projects
- 5 planned projects
Overall, these projects span 49 million square feet, with 95% of them concentrated in the Mumbai Metropolitan Region (MMR) and Pune.
Land Reserve and Funding Support
The company owns a total of 1886 acres of land in Maharashtra, Gujarat, and Rajasthan, making it a b real estate player. With this land bank, the company can further expand its project portfolio in the future.
Use of Funds from the IPO
The company had already outlined its plans for using the net proceeds from the IPO:
- Partial or full repayment of debts taken by the company and some of its subsidiaries.
- In addition, some funds will be used for general corporate purposes.
Rating and Valuation
Major brokerage houses like SBI Securities and KR Choksey gave a Neutral rating to Kaltaru's IPO.
They stated that the company's valuation is quite high, which is a risk factor. However, the company's pre-sales growth is good and could support it in the future.
All Eyes on Listing Day Performance
Now that the company's shares are going to be listed on the BSE and NSE today, the market is watching to see if any last-minute trading sentiment will drive the share price up or if a flat and slow listing will be observed.
