Real estate has been one of the most sought-after investment avenues in India, and Arkade Developers, a Mumbai-based real estate company, is all set to launch its ₹410-crore Initial Public Offering (IPO). The IPO, consisting entirely of fresh equity shares, aims to raise funds for the company’s ongoing and future projects. Let’s dive into the details of this upcoming IPO, how it stands out in the market, and what potential investors need to know.
All about Arkade Developers
Arkade Developers is a Mumbai-based real estate development firm with a prominent presence in the city’s residential market. Established with a focus on delivering high-quality residential properties, the company has built a reputation for its premium aspirational lifestyle developments. As of July 31, 2023, Arkade Developers has successfully developed 1.80 million square feet of residential properties, including through partnership entities where it holds a majority stake.
The company has gained recognition for its strong presence in the Mumbai Metropolitan Region (MMR), one of the most competitive and high-demand real estate markets in India. Since 2017, Arkade Developers has launched 1,040 residential units and sold 792 units, contributing significantly to its revenue growth.
Arkade’s business strategy revolves around the acquisition and development of residential projects, with a focus on gated communities and aspirational housing. Notable ongoing projects include Arkade Nest, Arkade Crown, Arkade Aspire, Arkade Prime, and Arkade Aura.
The company’s upcoming IPO, valued at ₹410 crore, marks an important step in its growth trajectory, with plans to utilize the proceeds for the development of ongoing and future real estate projects, as well as for general corporate purposes.
Arkade Developers IPO: Key Details
Arkade Developers is floating its IPO worth ₹410 crore, with the public offering set to open on September 16, 2024, and close on September 19, 2024. The bidding for anchor investors will take place on September 13, 2024. According to the company’s Red Herring Prospectus (RHP), the IPO consists solely of fresh equity shares with no Offer for Sale (OFS) component.
Arkade Developers is primarily focused on real estate development in Mumbai, a city known for its thriving real estate market. The funds raised from this IPO will be channelled toward multiple purposes, including the acquisition of new land, ongoing and upcoming real estate projects, and general corporate expenses.
Quick Facts:
| Aspect | Details |
| IPO Size | ₹410 crore |
| IPO Opening Date | September 16, 2024 |
| IPO Closing Date | September 19, 2024 |
| Anchor Investors’ Bidding | September 13, 2024 |
| IPO Type | Fully fresh issue (no OFS) |
| Pre-IPO Placement | ₹20 crore |
| Stock Listing | BSE and NSE |
What Are the Proceeds Going Towards?
Arkade Developers plans to utilise the proceeds from this IPO for various key business goals. According to the company, the raised funds will be used for:
- Development of ongoing projects
- Funding upcoming real estate projects
- Acquisition of future real estate projects
- General corporate purposes
The company has a strategic focus on premium residential developments in Mumbai, with aspirations to expand its real estate footprint in the region.
The Growth Journey of Arkade Developers
Founded in Mumbai, Arkade Developers is known for its significant presence in the Mumbai Metropolitan Region (MMR). As of July 31, 2023, the company has developed 1.80 million square feet of residential property, including projects carried out in partnership entities where Arkade holds the majority stake.
Arkade Developers’ core offerings include aspirational and lifestyle-driven residential properties. The company has already launched 1,040 residential units and successfully sold 792 units between 2017 and Q1 2023.
Key Projects:
Some of Arkade Developers’ ongoing projects include Arkade Nest, Arkade Crown, Arkade Aspire, Arkade Prime, and Arkade Aura. These projects demonstrate the company’s dedication to creating modern, high-quality living spaces in Mumbai’s competitive real estate market.
Financial Performance
Arkade Developers has demonstrated steady growth in recent years. The company’s revenue has seen a significant rise over the past few years:
| Period Ended | Revenue | Expense | Profit After Tax | Assets |
| 2022 | ₹237.18 | ₹178.89 | ₹50.84 | ₹369.97 |
| 2023 | ₹224.01 | ₹161.41 | ₹50.77 | ₹555.41 |
| 2024 | ₹635.71 | ₹471.56 | ₹122.81 | ₹575.01 |
While there was a slight dip in revenue from FY 2022 to FY 2023, the company’s performance has still been impressive. The revenue from operations has grown at a CAGR of 26.69% between 2021 and 2023. The company continues to maintain a strong market presence, with its focus on high-quality residential projects contributing to its sustained revenue growth.
Arkade Developers IPO Valuation
| KPI | Values |
| ROE: | 46.90% |
| ROCE: | 47.34% |
| EBITDA Margin: | 26.68% |
| PAT Margin: | 19.35% |
| Debt to equity ratio: | 0.21 |
| Earning Per Share (EPS): | ₹8.08 (Basic) |
| Price/Earning P/E Ratio: | N/A |
| Return on Net Worth (RoNW): | 46.90% |
| Net Asset Value (NAV): | ₹21.28 |
Arkade Developers’ Focus on Mumbai Real Estate
Mumbai, being one of the most expensive real estate markets in the world, is a prime location for Arkade Developers. The company’s projects are predominantly located in Mumbai and the Mumbai Metropolitan Region (MMR), where demand for residential and commercial spaces continues to grow.
The company has capitalised on this demand by launching several high-end residential projects, catering to the growing middle and upper-middle-class population in the city. Its focus on premium lifestyle developments positions Arkade Developers as a significant player in Mumbai’s competitive real estate market.
Strong Market Position
Arkade Developers’ strong position in the market is bolstered by its long-standing relationships with customers and partners. The company has garnered a reputation for quality, reliability, and timely project delivery, all of which are critical factors in the real estate industry.
IPO Offering and Pre-IPO Placement
A notable aspect of Arkade Developers’ IPO is that it is solely a fresh issue of shares worth ₹410 crore, with no offer-for-sale component. Additionally, the company has already raised ₹20 crore through a pre-IPO placement round, signalling early confidence in the company’s growth prospects.
The proceeds from the pre-IPO placement will be used to fund Arkade Developers’ ongoing projects, as well as for the acquisition of future real estate opportunities. This pre-IPO funding gives the company a financial boost, enabling it to focus on delivering high-quality projects.
Market Outlook and Future Prospects
Arkade Developers’ IPO comes at a time when the real estate market in Mumbai is experiencing strong demand for premium residential and commercial properties. Despite global economic challenges, the demand for quality housing in metropolitan areas like Mumbai remains robust.
The company’s significant experience, coupled with its pipeline of ongoing and future projects, makes this IPO an attractive opportunity for investors looking to enter the real estate sector.
Expansion Plans:
Arkade Developers is set to expand its portfolio by acquiring new land for future projects. With the proceeds from the IPO, the company plans to accelerate its growth by focusing on high-potential areas in Mumbai, ensuring that it remains a key player in the city’s real estate market.
Conclusion: Should You Consider Investing?
The Arkade Developers IPO presents a promising opportunity for investors, especially those with an interest in the real estate sector. With a strong focus on premium residential developments in one of India’s most competitive real estate markets, Arkade Developers has demonstrated solid financial performance and growth potential.
The company’s ₹410 crore IPO will help fund its ongoing and future projects, further strengthening its position in Mumbai’s real estate market. Investors looking to diversify their portfolios with real estate exposure may find this IPO particularly appealing.
With an experienced management team, a strong track record, and a robust pipeline of projects, Arkade Developers is poised for future growth, making it a company to watch in the coming years.
Disclaimer: This article is for informational purposes only. Please consult with a certified financial advisor before making any investment decisions.
