Mumbai-based Keystone Realtors Ltd, which operates under the ‘Rustomjee’ brand, filed its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) to raise up to Rs 850 crore via an initial public offering (IPO).
The initial share sale comprises a fresh issue of Rs 700 crore and an offer for sale (OFS) of up to Rs 150 crore by its existing shareholders and promoters. The OFS consists of up to Rs 75 crore by chairman and managing director Boman Rustom Irani, up to Rs 37.50 crore by Percy Soraji Chowdhry and up to Rs 37.50 crore by Chandresh Dinesh Mehta.
Keystone proposed to utilize the net proceeds worth Rs 427 crore will be used to repay debt availed by its subsidiaries, towards repayment or prepayment of certain borrowings availed by the company, and funding acquisition of future real estate projects and general corporate purposes.
Axis Capital and Credit Suisse are the book running lead managers to the issue.
Keystone is backed by HDFC Capital Affordable Real Estate Fund – 3, which currently owns 1.45% in the company. It is not planning to sell any shares as part of its shareholding in the IPO.
As of 31 March, Keystone had 32 completed projects, 12 ongoing projects and 19 projects in the pipeline across Mumbai Metropolitan Region (MMR), across affordable, mid and mass, aspirational, premium and super-premium categories, under the Rustomjee brand.
It has developed 20.05 million sq ft residential buildings, gated estates, townships, corporate parks, retail spaces and schools.
The residential sector, which Keystone focuses on, has seen a sharp recovery in both demand and sales during the course of the covid-19 pandemic, aided by low interest rates, affordability, improved customer sentiment and incentives such as stamp duty exemptions by some states.
Last year, Mumbai-based Macrotech Developers Ltd, that sells under the ‘Lodha’ brand and Bengaluru-based Shriram Properties Ltd raised Rs 2500 crore Rs 600 crore via IPO.
Another Mumbai developer Puranik Builders also filed draft papers in 2021 for an initial share sale.
