Macrotech lists at 10% discount to IPO price

Mumbai: Macrotech Developers, formerly Lodha Developers, made a weak debut on the bourses with the stock listing at Rs 439, a 10 per cent discount to its issue price of Rs 486. The stock ended at Rs 463 per share on BSE.

Analysts said retail investors should stay away from the stock as growing concerns over the second wave of Covid-19 could weigh on sentiment.

The market capitalisation of Macrotech was Rs 20,717 crore on Monday, making it the third most valuable listed property developer. DLF was valued at Rs 58,615 crore on Monday while Godrej Properties’ market capitalisation stood at Rs 36,327 crore.

Macrotech shares worth Rs 528 crore were traded on Monday with 32.63 per cent delivery on BSE and 61.12 per cent delivery on NSE.

“We suggest retail investors who got the allotment of the IPO to exit at current market price and not to do any fresh buy,” said Yash Gupta, analyst, Angel Broking. “We have some concerns towards the company like high debt and not able to generate free cash flow and now in the fear of the 2nd covid wave real estate sector may underperform the market.”

Saurabh Joshi, analyst at Marwadi Shares and Finance said the company is focused on the Mumbai Metropolitan region which is worst affected by Covid. He advises investors in the IPO to exit in the event of a bounce-back in the share price.

The Rs 2,500-crore-IPO of Macrotech was subscribed 1.29 times with many retail investors giving it a miss. This was the first among the 17 IPOs of 2021 where the retail portion was undersubscribed.

The offer attracted bids for 4.68 crore shares against the issue size of 3.62 crore shares. The institutional portion was subscribed 2.95 times and high networth investors bid for 1.28 times the shares set aside for them. Only 39 per cent of the retail portion was subscribed.