MACROTECH PIPS GODREJ FOR NO. 2 SPOT IN REALTY MARKET-CAP RACE

MUMBAI: Mumbai-based Macrotech Developers Ltd has become India’s second most valuable listed real estate firm, displacing Godrej Properties Ltd to the third spot.

The company, erstwhile Lodha Developers, closed with a market capitalization of ₹41,770.59 crore on Monday after its shares surged 4.75% to close at ₹934.15, BSE data showed. During the day, its shares hit a record ₹947.70. Godrej Properties ended at ₹1,495.10 on the BSE, up 1.52% from its previous close. Its market cap stood at ₹41,538.97 crore. DLF Ltd remains India’s top real estate developer, with a market cap of ₹79,135.72 crore.

Despite the lukewarm response to its initial public offering and a tepid debut, the Macrotech stock has gained nearly 91% from its issue price of ₹486 a share. Investors have shown interest in the stock after the company steadily reduced its debt and improved business momentum. The company aims to become net debt-free by 2024.

Analysts say Macrotech has a sizeable mid-income focused project pipeline across the Mumbai metropolitan region (MMR), and its foray into assetlight business development as well as land/annuity asset monetization are likely to keep momentum strong in FY22-24.

Macrotech has a 3,500-acre land bank for its industrial and warehousing business. The company has sold 255 acres already. While no sales concluded in the first quarter, a 22-acre land sale was done in July and a deal for another 40 acres is in advanced discussions. As of June 2021, its net debt stood at ₹12,500 crore, down 22% from fiscal year 2021. Collections were at ₹1,714 crore during the quarter.

“Over 9MFY22-FY24, we expect consolidated net debt levels to fall by another ₹70 billion to ₹68 billion, driven by strong operating cash flows and lower finance costs. Faster land-bank monetization and the potential sale of completed annuity assets could accelerate deleveraging,” said IIFL Securities in a note.