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Arkade Developers, a Mumbai-based real estate company, has experienced a strong opening for its initial public offering (IPO), attracting significant investor interest on the first day of bidding. The IPO, seeking to raise Rs 410 crore, garnered a subscription rate of 5.8 times on September 16, exceeding the offered 2.37 crore equity shares by a substantial margin. This positive reception reflects the confidence investors have in Arkade's future prospects and the buoyant state of the Indian real estate market.
The strong demand for the IPO was fueled by enthusiasm from both retail and non-institutional investors. Retail investors, a crucial segment of the IPO market, demonstrated significant interest, subscribing 8.06 times their allotted quota. Non-institutional investors, including high-net-worth individuals and family offices, followed suit, with a subscription rate of 7.9 times. While qualified institutional buyers (QIBs) subscribed at a more moderate 0.24 times, the overall high subscription rate highlights the strong investor appetite for Arkade's offering.
Arkade, known for developing premium residential projects in Mumbai, has a track record of delivering high-quality properties. The company has successfully completed 28 projects in the Mumbai Metropolitan Region (MMR) over the past two decades, accumulating a total of 2.2 million square feet of residential property developed by June 2024. This experience and reputation have contributed to the IPO's success, reassuring investors about Arkade's capability in the real estate sector.
The proceeds from the IPO will primarily be utilized for funding Arkade's ongoing projects. The company has allocated Rs 250 crore for this purpose, ensuring the smooth completion of these developments. The remaining funds will be used for acquiring new land parcels, further expanding Arkade's portfolio of projects. General corporate purposes, such as working capital management and administrative expenses, will also be funded by the IPO proceeds.
The successful IPO launch signals Arkade's strong position within the Indian real estate market. The company's commitment to developing premium residential projects, its proven track record, and its strategic allocation of funds have all contributed to investor confidence. As Arkade moves forward with its expansion plans, it is well-positioned to benefit from the growing demand for high-quality residential properties in Mumbai and the surrounding region.
Source: Arkade Developers IPO subscribed 5.8 times on day 1; retail portion subscribed 8 times