Keystone Realtors Limited IPO
Issue Open
Price Band
Issue Size
Issue Close
Bid Lot
Listing Exchange
Issue Type
Minimum Order Quantity
Face Value
Listing At
Keystone Realtors Ltd
About the
company
Keystone realtors are one of the prominent real estate
developers in the micro markets that the company is present in. They have a
market share of 28% in Khar, 23% market in Juhu, 11% in Bandra East, 14% in
Virar, 3% in Thane and 5% in Bhandup in terms of absorption (in units) from
2017 to 2021.
They are led by experienced Promoters and a professionally
qualified senior management team to provide the strategic direction and
implementation of growth plans. The business is headed by Boman Rustom Irani as the Chairman and Managing Director.
As of June 30, 2022, Rustomjee has developed 20.22 million
square feet of high-value and affordable residential buildings, premium gated
estates, townships, corporate parks, retail spaces, schools, iconic landmarks
and various other real estate projects.
Strengths
·
As of June 30, 2022, they had 32 Completed
Projects, 12 Ongoing Projects and 21 Forthcoming Projects across the Mumbai
Metropolitan Region (“MMR”) that includes a comprehensive range of projects
under the affordable, mid and mass, aspirational, premium and super premium
categories, all under the Rustomjee
brand.
·
A strong ‘Rutomjee’ brand image also encourages
stakeholders in the real estate development industry to prefer partnering with
the company, in particular for re-development and stalled projects.
·
Amongst the leading residential real estate
development companies in MMR with a well-diversified portfolio and strong
pipeline.
·
The company’s business model focuses on entering
into the joint development agreements, redevelopment agreements with landowners
or developers or societies, which requires lower upfront capital investment
compared to direct acquisition of land parcels.
Risks
·
The business commands over 50% price premium in
the markets of Juhu, Bandra East and Khar, as compared to the average price of
the Western Suburbs micro-markets. Any change in the demand for the flats could
affect the financials of the company.
·
Rustomjee has high levels of debt on its balance
sheet. The Net Debt of the company as of Q1FY23 stood at Rs. 1,192 crores. The
debt to equity ratio is 1.10x which is high.
Operational
Update
Particulars |
FY20 |
FY21 |
FY22 |
Q1FY23 |
No. of Buildings Launched |
- |
7 |
12 |
2 |
No. of Completed Buildings |
7 |
4 |
3 |
2 |
Pre-Sales (Units sold) |
607 |
823 |
1241 |
225 |
Collections (In Rs. Crores) |
1,271 |
1,239 |
2,038 |
404 |
Financial
Snapshot
Particulars (In Rs. Crores) |
FY20 |
FY21 |
FY22 |
Q1FY23 |
Revenue from operations |
12,115 |
8,487 |
12,694 |
1,686 |
Restated Profit after Tax for the Period / Year |
145 |
2,318 |
1,358 |
42 |
Gross Margin (%) |
25.63% |
27.80% |
22.11% |
20.74% |
Adjusted EBITDA Margin (%) |
15.97% |
17.61% |
16.60% |
6.85% |
Net Debt / Equity Ratio |
7.7 |
1.19 |
1.38 |
1.1 |
Conclusion
Rustomjee is a premium brand name in Mumbai with a prime
market share in sub-markets such as Juhu, Bandra and Khar. The business
leverages its brand image and commands a higher premium. However, its financials
have not been strong. Its geographical concentration remains to be a concern.
The company comes at a fair valuation but the company is debt-heavy which will
keep the margins under pressure. We advise our investors to AVOID the IPO.