Casagrand to File DRHP for Rs.800 Crore IPO

With the NSE Realty Index at all time highs, there is a surge of interest in realty stocks. Chennai based Casagrand is the latest in the list of realty companies planning to file its draft red herring prospectus (DRHP) with SEBI for an initial public offer. The company plans to file the DRHP by early October but the actual issue may come only in the beginning of the next calendar year. The funds will be used to fuel its aggressive growth plans.

While the details of the IPO are yet to be firmed up, it is reported that the IPO size could be in the range of Rs.800-1,000 crore, which will include a fresh issue portion and also an OFS. Motilal Oswal and JM have been appointed lead managers for the issue. Casagrand had recently raised around Rs.1,200 crore from two reputed PE firms viz. Apollo Global and KKR.

While Chennai will be its core market, Casagrand plans to expand its Bengaluru franchise and also make a foray into Hyderabad. It plans to invest Rs. 1,500 crore in Hyderabad and Bengaluru. Going ahead, Bengaluru and Hyderabad are estimated to contribute 35% of revenues while Chennai will contribute 65%.

During the current year, the company plans to acquire land parcels with turnover potential of Rs.10,000 crore compared to Rs.6,000 crore last year. In terms of total sales revenues, Casagrand proposes to enhance its sales revenues from Rs.2,300 crore in FY21 to Rs.3,750 crore in FY22. It also hopes to gain from the revenge buying expected to emerge as the economy recovers from the lag effect of the pandemic.

While Casagrand is currently developing upmarket villas with an average ticket size of Rs.85 lakhs, it wants to largely focus on the affordable housing segment in the range of Rs.25 lakhs to Rs.45 lakhs. The broad plan is that by 2024, Casagrand will develop 25 million SFT of residential projects and 5 million SFT of office properties. In addition, it also plans to develop around 10 million SFT of warehouse logistics space.

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