Godrej Properties IPO listing

Godrej Properties equity shares will list on 5th Jan to the stock exchanges.

Earlier company has come up with IPO of 9429750 equity shares of Rs 10. Issue was open for subscription from Dec 9 to Dec 11. Company has got good response from qualified institutional investors where it got subscribed 7.45 times. Retail investors and Non institutional investor quota were not fully subscribed.

Company has fixed share issue price at Rs 490 per share, which is lower end of price band Rs 490-530. It has collected more than Rs 460 cr. from this IPO.

Reason for IPO:

- 30% of IPO money would be used for debt repayment.

- Company will acquire land development rights for upcoming projects, investment in new projects.

Company Fundamentals:

Positive:

- Company carries brand name of Godrej. Godrej Industries holds 80.26% in the company.

- Operates in the real estate sector where demand is likely to pick up in upcoming years after current slowdown.

- Qualified Institutional Investors looks quite bullish on the stock, which can add some premium to the counter on the listing day. If this continues you'll see appetite for the stock from Mutual Funds, HNI and Retail Investors

Negative:

- Many brokering houses have downgraded real estate as sector.

- People look more skeptical regarding turn around in the sector.

- Larger players are available in the market as cheap valuation.

Listing Price:

I see Godrej Properties to list around Rs 500-510.

Long term investors should wait for initial market reaction to get into the stock. One can buy this stock during market correction.

Happy Investing!!