Square Yards Plans to Files DRHP for IPO

The most happening segment in the real estate space today is not property development or property consultancy. It is the emerging segment of PropTech. As the name suggests, PropTech is at the confluence of property services leveraging extensively on technology and digital interfaces and platforms.

Once such well known PropTech company, Square yards proposes to file its DRHP to raise Rs.1,500 crore via public issue.

Square Yards plans come out with the Rs.1,500 crore IPO to bankroll its future growth and expansion plans. The company is yet to file its draft red herring prospectus (DRHP) with SEBI but as per early indications from the company it will be a combination of a fresh issue and an offer for sale. Apparently, Square Yards has also finalised investment bankers for its proposed public issue. Further details of the issue are awaited.

Square Yards is based out of Gurugram, which is one of the fastest growing and most happening property markets in India as part of the Delhi-NCR region. Till date, Square yards has already raised $125 million through a roughly equivalent mix of debt and equity.

This IPO will give partial exit to some of its promoters and early backers as well as providing a listing presence to the company in the stock markets as a barometer of value.

Some of the early backers of Square Yards include Kae Capital, ADM and Bennett Coleman. The business model of Square Yards can be split into 3 verticals viz. property brokerage, home loan brokerage and rental businesses. The advantage is that Square Yards offers the complete suite of PropTech services starting from real estate prospecting to short listing to discovery to funding to actual transaction execution.

As an add on service, Square yards also offers supplementary services including home interiors, property management and post-sales services. For FY21, Square Yards posted sales revenues of Rs.250 crore while it continues to make losses due to front-ending of early stage investments in infrastructure and marketing.

Till date, Square Yards has facilitated property sales worth Rs.6,100 crore while it has helped syndicate home loans of Rs.1,900 crore.

One of the most prominent PropTech firms in India, NoBroker.com, has raised funding recently at a valuation of $1 billion, making it the first PropTech unicorn in India. As an added support service, Square Yards also provides SAAS based services to property developers and realty agents as part of its scalable growth model. The expected enterprise value of Square Yards is yet to be finalized.

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