In its April 22 board meeting, Macrotech Developers Ltd will consider issuing bonus shares, its first ever, as well as approving its March quarter and FY23 annual results.
The real estate developer, which sells homes under the Lodha brand name, has not declared a dividend so far or rewarded its shareholders through corporate action, since listing on April 19, 2021.
The company had listed at ₹439, a discount of 10 per cent to its issue price. The stock hit a lifetime high of ₹1,538.65 in December 2021. Since its listing two years ago, the stock price has just about doubled, based on the closing price last Thursday.
Financial performance
The company has ended FY23 with pre-sales of ₹12,000 crore, up from the ₹9,000 crore reported a year ago. Collections during the year also rose by nearly a fourth to ₹10,600 crore, enabling the company to reduce its debt on the Indian operations to ₹7,070 crore, with ₹1,000 crore being paid during the March quarter.
It has exceeded its guidance for the year by adding new projects with a revenue potential of close to ₹20,000 crore. It had expected to end the year with new projects worth ₹15,000 crore.
The company has paid no dividends so far, preferring to use its cashflows to reduce its debt burden. The issue of bonus shares is likely the way the company is planning to reward its shareholders, without having to fork out cash for dividends, while shareholders also will not be liable for any tax payment on bonus shares.
With average daily trading volumes of just over 5 lakh shares, the company may also be trying to infuse liquidity in its stock and make it cheaper for them. In December, the company reduced its promoter holding to below 75 per cent, to meet the minimum 25 per cent public shareholding norm.
Most broker firms have a buy rating on the stock as they feel that the company is well placed for growth with its leadership position in the Mumbai Metropolitan Region while it has also managed its cash flows judiciously.
Nuvama Institutional Equities said in a recent note that faster land monetisation at Palava, portfolio growth, geographical diversification, and annuity asset sales can be potential stock catalysts.