Rustomjee Group firm Keystone Realtors IPO subscribed 0.08 times on day 1

• The IPO saw the portion for retail investors subscribed 0.12 times.
• Keystone Realtors plans to raise ₹635 crore through the IPO – ₹560 crore of it through a fresh issue of shares and ₹75 crore through an offer for sale by promoters and existing shareholders.
• The price band of the IPO is set at ₹514-541 a share.

The initial public offering of Keystone Realtors, which operates under the brand ‘Rustomjee’, was subscribed 0.08 times on Monday, the first day of the issue. The IPO will close on November 16.

The IPO saw the portion for retail investors subscribed by 0.12 times. Meanwhile, the portion reserved for qualified institutional investors was subscribed 0 times as only 756 shares were bid against 24.70 lakh on offer.

Keystone Realtors plans to raise ₹635 crore through the IPO – ₹560 crore of it through a fresh issue of shares and ₹75 crore through an offer for sale by promoters and existing shareholders. The price band of the IPO is set at ₹514-541 a share.

The company is in the business of real estate construction, development and other related activities in India. As of June 30, 2022, it had 12 ongoing projects and 21 forthcoming projects across the Mumbai Metropolitan Region (MMR), under affordable, mid and mass, and some premium categories.

IPO proceeds will be utilised towards debt repayment, funding acquisition of future real estate projects, and general corporate purposes.

Category of investors	Subscription status
Qualified institutional buyers	0.00 times
Non institutional investors	0.11 times
Retail	0.12 times
Overall	0.08 times

As of June 30, 2022, it had developed 32 projects, over 280 buildings, 20.22 million square feet area (including infrastructure) and homes for over 14,000 families.

Further, total borrowings of the company increased to ₹1,557 crore in FY22 from ₹1,220 crore in FY21. The company added that the development of real estate projects involved significant expenses, a large part of it funded through financing from banks and other financial institutions.

The company mentioned in its red herring prospectus (RHP) that it may face issues in raising additional loans. “Moreover, certain of our loan documents contain provisions that may limit our ability to incur future debt, make certain payments or take certain actions,” it said.

In FY22, the real estate company’s net profit slumped 41% from a year earlier to ₹136 crore while revenue rose 50% to ₹1,269 crore.

Particulars	Revenue from operations	Net profit
FY22	₹1,269 crore	₹136 crore
FY21	₹848 crore	₹231 crore
FY20	₹1,211 crore	₹14 crore

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