Real estate developer Signature Global (India) Ltd has cut the size of its initial public offering even as stock markets trade near record highs.
The north Indian property developer's proposed IPO now intends to raise Rs 730 crore (about $88 million), according to the company's updated red herring prospectus. The planned IPO size was Rs 1,000 crore when it filed its draft red herring prospectus in July last year.
The IPO comprises a fresh issue of shares by the developer to raise Rs 603 crore and an offer for sale by International Finance Corporation to mop up Rs 127 crore.
The proposed size of the fresh issue was previously Rs 750 crore while IFC, the private-sector investment arm of the World Bank Group, had planned to sell share worth Rs 125 crore.
Sarvpriya Securities Pvt. Ltd, part of the company's promoter group, earlier intended to sell shares worth Rs 125 crore but has now dropped the plan.
IFC owns a 5.38% stake in the company. The company also counts an alternative investment fund managed by HDFC Capital as an investor with a 3.5% stake.
Signature Global develops housing, office and retail real estate projects mainly in the northern cities of Gurugram, Karnal and Ghaziabad. The company's revenue from operations for the financial year ended March 31 jumped 72% from a year earlier to Rs 1,554 crore while consolidated loss after tax narrowed to Rs 63.86 crore from Rs 116 crore a year earlier.
The IPO comes at a time when benchmark stock market indices have scaled all-time highs, with the Nifty 50 crossing the 20,000 level thanks to the inflow of funds from foreign as well as domestic investors. However, analysts say high interest rates to control inflation present a challenge to property developers and this could be one of the reasons for Signature Global to cut its IPO size.
Signature Global's IPO opens Sept. 20 and closes two days later Sept. 22. The anchor investors' book will open on Sept. 18.
ICICI Securities, Axis Capital and Kotak Mahindra Capital are managing Signature Global's IPO.
