Realtor Ashwin Sheth Developers is planning to float an initial public offering in the next 18-24 months to raise anywhere between ₹2,500 and ₹3,000 crore, its top officials said.
It is also planning to invest ₹4,500 crore over the next 3-5 years even as it is prepared to foray into other cities such as Delhi, Bengaluru, Hyderabad, Chennai, and Goa. In Bengaluru, it is close to launching three projects; in Pune, it is considering signing some term sheets; while it is still exploring the Delhi-National Capital Region and other cities, said Chairman and Managing Director Ashwin Sheth.
The proceeds of the IPO will be used to pare ₹400-crore debt and also to acquire land parcels.
In the pipeline
In its home city of Mumbai, it has signed 5-6 big projects under joint development agreements. These are large projects, said Bhavik Bhandari, Chief Sales and Marketing Officer. One of the projects in the suburbs of Kandivali of 1 million sq ft (msf) has a revenue potential of ₹3,500 crore, another one in Sewri of 3 msf has a revenue potential of ₹7,000-8,000 crore, and another in south Mumbai of ₹1,200-2,000 crore. It has acquired a land parcel in Mazgaon in a joint venture with a development potential of 2 msf and topline of ₹3,000 crore.
In FY24, the company reported sales revenue of ₹1,486 crore, three times of what it did the year before.
In the next five years, it is looking to expand its business five times and volumes are seen rising three times. Its profitability and margins are seen improving 10-15 per cent in that time. By the end of that period, it expects to have a portfolio of 40-45 msf.
Sheth said demand for housing is expected to sustain especially if the economy grows according to projections. He added that if the increase in home prices is reasonable and in keeping with the rise in costs of raw materials, then it would not materially affect demand.
Currently, around 70-75 per cent of the company’s topline comes from its premium projects, while around 15 per cent from its luxury projects and the remaining from its mid-income homes.
With its expansions plans progressing, this ratio is expected to change and the premium segment’s contribution dropping to 50-55 per cent.