The property market is an unpredictable market just like any other investment pathway. Sometimes there are no ready properties, but the prices are still high and other times there are a lot of properties available but no buyers. There are a lot of top builders in the market who have great properties on their CVs. One such company is Shriram Properties, which has some great projects on its portfolio which pushed its success so far that the company has released its IPO. In this article, we will inform you about Shriram Properties IPO subscription status, Shriram Properties IPO expected price and how this IPO will perform in future.
Shriram Properties IPO Subscription Status, GMP
Many companies have come out with their IPOs in the last year. Shriram Properties joined this list last December. There was a buzz about this IPO because of the prominence of Shriram Properties in the properties market. But before we cover Shriram Properties IPO subscription status, Shriram Properties IPO expected price, GMP etc. Let us learn about the company in brief.
About Shriram Properties
A part of the Shriram Group, this company has its headquarters in Bangalore, India. Shriram Properties is in the property business and is present in Chennai, Bangalore, Vizag, Coimbatore, and Kolkata markets. So far the company has provided homes to more than 22,000 families that they can boast of and 40 percent of its sales have come from referrals of existing old customers. This company was founded in 1975 on the 11th of October.
The company has made a huge name for itself in the South of India. They are not just in the business of making apartments, but they also make villas and villaments. So far they have delivered property on a 12.5 million square feet area and this number is set to be increased by 54.76 million square feet once they finish their current projects. The company claims that they deliver the right homes at the right prices at the right locations. They take pride in having built their business based on trust, transparency, and quality. The current share price of this company on NSE stands at 79.15 rupees as it gained 3.05 rupees or 4.01% value on October 6th, 2022.
Shriram Properties IPO Price
Shriram Properties IPO was available for subscription between 8 December 2021 and 10 December 2021. The IPO was a book built-type issue and the issue size stood at 600 crores.
The fresh issue stood at 250 crores in this IPO and shares worth 350 crores were offered for sale. The face value of the shares was 10 rupees per share. The price band for these shares was set between 113 and 118 rupees and each lot had 125 shares. Thus, a retail investor could bag a maximum of 13 lots or 1,625 shares for 1,91,750 rupees.
The share got listed on NSE as well as BSE. The employees got a discount of 11 rupees per share. QIB quota in this IPO stood at 75%, NII quota at 15%, and retail quota at 10%. The share allotment was made on 15th December 2021. Refunds were made on 16th December 2021.
Shares were credited to the Demat account of the holders on 17th December 2021 and the IPO got listed on both stock exchanges on 20th December 2021. We will discuss Shriram Properties IPO expected price in a separate section below.
Information about the IPO
Here are some crucial details of Shriram Properties IPO.
- The company’s issue size stood at 600 crores. Out of these, shares worth 250 crores were fresh issues, and the remaining shares worth 350 crores were offered for sale.
- The date to apply for the shares was between 8 December 2021 and 10 December 2021. The allotment took place on 15 December 2021 and the listing happened on 20 December 2021. Refund initiation and credit of shares to Demat account both took place on 16 December and 17 December 2021 respectively.
- The price of one share was placed between 113 and 118 rupees with each lot having 125 shares. Employees were given an 11 rupees discount per share.
- In total, the share was subscribed 4.60 times. QIBs subscribed the share 1.85 times, NII subscribed the share 4.82 times, retail investors subscribed the share 12.72 times and employees subscribed the share 1.25 times. KFin Technologies Limited did the registry of this IPO.
- The face value of each share was 10 rupees.
Reason for this IPO
IPO has one common purpose which is to bring money to the company. The question still remains as to how the company plans to use these funds? Each company has a different purpose for which they are looking to raise money and in the case of Shriram Properties, they required money for some general corporate purposes because of certain laws. Apart from that, they also wanted to make repayment and pre-payment in part and full for various subsidiaries of the Shriram group, which include Shriprop Structures, Global Entropolis, and Bengal Shriram.
Usually, an IPO is issued for the purpose of getting funds to expand or grow one’s business. It is also an opportunity for the promoters to sell their shares for a profit and to make money from it.
Here are some points that make Shriram Properties IPO a good investment option.
- The company belongs to the well-recognized Shriram Group of Companies.
- In the south of India, this company enjoys a strong position.
- They have a proven track record with their past projects being a hit with the people.
- The company has a good and strategic relationship with its financial investors which bodes well for them.
- Not only is the company’s business scalable, but they also have an asset-light model of business.
- The company’s financial position is strong.
- The company is in such a position that it will enjoy the benefits of any regulatory or industry development.
- The management team behind this company is experienced and professional.
While this IPO has its strong points, it has some vulnerabilities that investors must know before checking Shriram Properties IPO subscription status. Some of them are as follows.
- The company revenue has constantly been on a fall from FY 19 to FY 21 and that does not paint a good picture.
- After making a profit in FY 19, the company started making losses and has been making losses for 2.5 years, which again is a bad thing.
- The company depends on the real estate market to do well, especially in the South India market. A slight change in market conditions can send the company’s profitability and business for a toss.
- COVID-19 has had a huge effect on the business of this company and who knows how long till the company fully recovers.
- The company is just present in South of India and change in any factor in that region can make the situation worse for the company.
- The company has a debt and this may pose a threat to its future financing or growth ambitions.
- The company and its subsidiaries may see some of the loans recalled at any given point in time as they are unsecured loans.
Also Read: Delhivery IPO Valuation, Date, Share Price
In the table given below are all the details regarding Shriram Properties IPO subscription status.
You can find all the important dates like the allotment date and listing date of Shriram Properties IPO in the table below.
|IPO Opening Date||December 8, 2021|
|IPO Closing Date||December 10, 2021|
|Basis of Allotment||December 15, 2021|
|Initiation of Refunds||December 16, 2021|
|Credit of Shares to Demat||December 17, 2021|
|IPO Listing Date||December 20, 2021|
Shriram Properties IPO Subscription Status
QIBs oversubscribed their 75% quota of shares as they subscribed for 1.85 times of total available shares. NIIs oversubscribed their 15% quota of shares as they subscribed for 4.82 times of total available shares. Employees oversubscribed their quota of shares as they subscribed for 1.25 times of total available shares. Retail Investors oversubscribed their 10% quota of shares as they subscribed for 12.72 times of total available shares. This meant that the share was oversubscribed in total, and it was applied for 4.6 times more than the originally available shares.
Though the share was oversubscribed in the application stage what followed was a disaster class as the share opened at a discounted price and the investors made a loss on it. Let’s now look at the GMP of the share which paints a further stark picture.
Shriram Properties IPO GMP
GMP or gray market premium of a share means the premium price that the share is expected to command on its release. It means that if the share was expected to open between 113 and 118 rupees then the GMP of 10 rupees would mean that the share will open at 128 rupees. This would give the investor a 10 rupee benefit per share. A GMP is an unofficial calculation made based on sentiments around an IPO to determine if it will be profit giving or not and if yes then how much.
People often offload the shares for a premium before the share even gets listed but all of this is done unofficially. There are shares that command a massive GMP which sees the shares open on more than 50% of the price of the IPO or even double the price of the IPO thereby doubling the investor’s money in one day.
When it came to Shriram Properties IPO GMP the amount stood at 20 rupees for three consecutive days. On 7 December, 8 December, and 9 December 2021, the share commanded a GMP of 20 rupees. This GMP fell by 10 rupees to 10 rupees and stayed so on December 10 and December 11 of 2021. However, when it came to opening day the share opened at the price of 90 and 94 rupees per share on both NSE and BSE respectively. Now, let us learn about Shriram Properties IPO expected price.
Shriram Properties IPO Expected Price
As per the GMP, the Shriram Properties IPO expected price was set at a premium of 10 rupees meaning that the share will open at 128 rupees. However, when the listing day came on 20th December 2021 the share opened at the upper band of price of 90 and 94 rupees on both NSE and BSE. This meant that there were no listing gains for the investors as there was no premium on the IPO. Instead, the investors made a loss on the share as soon as it opened.
The share had been oversubscribed and was done so by a decent margin, so there were positive expectations around this IPO. All the eligible investor categories oversubscribed the shares as their allotted quotas were met and crossed comfortably. Employees got an 11 rupee discount per share, and yet they too could not make any profit from listing as the performance of the share was very poor.
Shriram Properties Present Day Scenario
So as stated the IPO opened at 94 and 90 rupees per share on BSE and NSE. But what happened later that day? And what is the current scene with this share that is not even a year old? Later on the IPO day, the stock scaled a high of 106.35 rupees on BSE after it opened at 94 rupees. The share saw a low of 91.75 rupees on the day and the last trade was made at 99.40 rupees. In the case of NSE, the stock scaled a high of 106.40 rupees after it opened at 90 rupees. The share saw a low of 90 rupees on the day and the last trade was made at 99.60 rupees.
Currently, Shriram Properties’ share is priced at 79.10 rupees on NSE which is 3 rupees more or 3.94% more than its previous price. On 6th October 2022, the share saw a day high of 79.75 rupees and a day low of 76.35 rupees. The 52-week high of the share stood at 115.75 rupees and the 52-week low of the share stands at 59.55 rupees.
On BSE Shriram Properties’ share is priced at 78.95 rupees, which is 2.80 rupees more or 3.68% more than its previous price. On 6th October 2022, the share saw a day high of 79.75 rupees and a day low of 75.15 rupees. The 52-week high of the share stood at 115.75 rupees and the 52-week low of the share stands at 59.55 rupees.
Why IPOs fail?
Here are some major factors that can cause an IPO to fail in the stock market.
- In an IPO it is the promoters of the company who sell off their shares. Sometimes these promoters start selling their shares early to make a profit. This greed from the promoters can spell doom for an IPO as the people can lose trust in a company when they see promoters selling off their shares.
- The fundamentals of a company play a big part in making or breaking the case for its IPO. The company can spoil its IPO by lying about its fundamentals.
- The timing of an IPO also is very important. If the markets are down and the condition doesn’t look like improving anytime soon then the IPO opening at such a time can expect to see slow growth or even no growth.
- The company valuation is an important factor in deciding how an IPO will perform. Company and investment bankers decide together as to what value should the share be given to the share as if it goes wrong then retail and institutional investors suffer the worst. Valuation also becomes the reason for a lot of stocks to trade below the issue price no matter how bullish the market or investors are.
- A lot of well-performing companies with great goodwill, name, fundamentals, technical, etc. have over the years also failed to get their IPOs up and running and there is no reason for this to happen. Their track records and numbers were spick and span; however, they still managed to tank. Therefore, you cannot predict whether an IPO does well or not as there are no bases to provide sure shot passing or failing assessment measures.
Future of Shriram Properties IPO
Shriram Properties looked like a promising IPO which came with its own risks as well. As with any IPO it was oversubscribed as well but no one knows what went wrong with it during the listing. The share had a GMP as well but failed to even open at a premium.
From its listing to almost one week before it completes a year on the stock exchange, the share has so far failed to go over its upper-band price. This means that the people who purchased this IPO are yet to make a profit from it. The share currently is almost 33% away from even breaking even and that makes this IPO a bad one. Who knows how it will perform in the future but it is safe to say that things are not looking good for this IPO.