Lodha Group raises Rs 4,000 crore from foreign, domestic investors through QIP

March 9, 2022

Lodha Group, listed as Macrotech Developers, has raised Rs 4,000 crore from foreign and domestic institutional investors through the largest-ever Qualified Institutional Placement (QIP) by a real estate developer in India.

Existing shareholders of the company, including Capital Group, Ivanhoe Cambridge (CDPQ arm), Wellington, Nomura, Manulife, Nippon and Max Life, have increased their investment in the company through this issue.

The Institutional placement also saw new marquee investors like GIC, Oppenheimer, Universities Superannuation Scheme (USS), Amundi, Tata Mutual Fund, etc.

“The significant demand from marquee investors enabled us to launch and close the QIP within hours of opening the book…We see that all the structural factors are in place for significant growth in volumes in housing, especially in the middle income and affordable segments, which is a focus area for us,” said Abhishek Lodha, Managing Director, Macrotech Developers.

With this fund raise, the developer is on course to achieve its dual target of deleveraging and capital light expansion through joint development model. The company’s debt to equity ratio now stands at 0.75 times.

The book was oversubscribed by more than 3 times and witnessed traction from a diversified set of investors such as, sovereign fund, pension fund, mutual funds, insurers, etc. The institutional placement was subscribed by both existing and new developers.

More than 90% of the book was allocated to marquee long only global investors.

“We are seeing a very robust pipeline of joint development agreement (JDA) deals and plan to invest nearly Rs 3,000 crores over the course of next 6 quarters through these JDAs and add about Rs 40,000 crores worth of gross development value (GDV) to our portfolio.”

Lodha intends to utilise the issue proceeds to grow in under-represented micro markets of Mumbai Metropolitan Region (MMR) and Pune in a capital efficient manner. The company is also exploring plans to enter into the Bangalore market.

The company plans to nearly double its pre-sales to Rs 14,000 crore by 2023-24 and further grow to Rs 20,000 crore by 2025-26.

BofA Securities India, JP Morgan India, Kotak Mahindra Capital Company are the book running lead managers to the issue.

The developer had raised Rs 2,500 crore through its initial public offering (IPO) of equity shares in April.

The IPO was priced in Rs 483-Rs 486 band and the issue price was set at Rs 486 per share. The listing price was nearly 10% lower than the issue price. However, the stock has risen over 180% since its listing.

For the quarter ended September, the company reported consolidated net profit of Rs 221.85 crore as against net loss of Rs 359.25 crore a year ago. Revenue from operations rose 136% to Rs 2,124 crore.

Published in Economic Times