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Shriram Properties Shares Debut at Rs. 90, 23% Below IPO Price

22 February 20234 mins read by Angel One
Shriram Properties Shares Debut at Rs. 90, 23% Below IPO Price
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Shriram Properties, a real estate developer, made a weak debut on the stock exchanges on December 20, 2021, as the stock had a discount of over 20% compared to the issue price. On the National Stock Exchange, Shriram Properties share price today began trading at Rs. 92.

Shriram Properties has raised around 600 crores through its public issue. Most analysts rated the issue as a “subscribe” due to its strong execution strategies, which they expected to see the recovery of the sector.

Based on the company’s semi-annual standalone numbers of FY 2021-22, the IPO was valued at 2.28 times book value, which is in line with the listed peers.

Though the Shriram Properties stock price traded at discount, the company’s robust track record, strong parentage, and good execution capabilities are some of the key factors that attracted investors to the issue.

Subscription Details

The Shriram Properties IPO news about subscription was celebrated on the last day of the offer with the huge demand it received. The public issue of real estate firm, Shriram Properties, saw a good response from investors, with the issue being subscribed 4.6 times. Retail investors’ portion was the most subscribed one at 12.72 times the portion allocated to them. Qualified institutions had subscribed 1.85 times whereas employees had reached a similar mark of 1.25 times.

The lead managers of the IPO which was subscribed 4.82 times by the non-institutional high net worth investors were Axis Capital, Nomura Financial Advisory, and ICICI Securities. And the registrar of the Shriram Properties IPO was KFintech Pvt. Ltd.

More about Shriram Properties IPO

  • As part of its financial plans, Shriram Properties raised funds through a maiden IPO primarily to be used for the payment of certain debts of the group companies.
  • The issue consists of a fresh issue of Rs. 250 crore and an offer for sale of 2,96,60,000 shares, which is at the higher price band of Rs. 118.
  • The price band has been fixed at between 113 and 118 per share. The minimum application for 125 shares is made before the end of the month.

Key Highlights about the Company

  • Shriram Properties is a leading real estate development company in South India. It primarily focuses on the affordable and mid-market segments. The company is also known for its premium and luxury housing projects.
  • They have completed 29 projects in the cities of Chennai and Bengaluru as of September 30, 2021. As of now, the company has a total of 35 projects in various stages of development.
  • They have the reputation of the Shriram Group of companies. With its professional and experienced management team, Shriram Properties stands strong and has strategic relations with investors, and has a strong financial position.


How is the discount percentage of listings calculated?

Discount is the percentage difference between the issue price and the price at which the stock was listed on the stock exchange. You can calculate the listing discount using the following formula: (Issue price – Listing price) ÷ Issue price. Multiplying the same outcome with 100 will give you the answer in percentage.

What are the reasons behind shares listing at a discounted price?

There are several reasons for shares to list at discount such as high valuations at the time of issue, over market sentiments on a listing day are negative, under subscription of the initial public offer, the purpose of the company to raise funds is not rational, etc. There are many other factors too that have an impact on whether the shares will list at a discount or premium.

In which group of securities was the Shriram Properties stocks listed?

The shares of Shriram Properties were listed in the Group B of securities. The shares in India are classified into Group A, B, S, T, and Z. The shares that are classified as B group stocks often see normal trading volumes and have a rolling settlement system. It is a residual category. Stocks not falling under any other category fall under category B.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.

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