Shriram Properties IPO: Loss Making, But Don't Be Surprised On Listing Gains

Shriram Properties is set to open its initial public offering on Wednesday, December 08, 2021

The Price Band of the offer has been fixed at Rs. 113 to Rs. 118 per Equity Share. Bids can be made for a minimum of 125 equity shares and in multiples of 125 Equity Shares thereafter.

The Offer comprises of issuance of Equity Shares aggregating up to Rs. 600 crores and includes a fresh issue of Equity Shares aggregating upto Rs. 250 crores and an offer for sale aggregating upto Rs. 350 crores.The offer of sale aggregates upto Rs. 90.95 crores by Omega TC Sabre Holdings Pte. Limited, upto Rs. 8.34 crores by Tata Capital Financial Services Limited, upto Rs. 92.21 crores by TPG Asia SF Pte. Ltd, upto Rs. 133.50 crores by WSI/WSQI V (XXXII) Mauritius Investors Limited (The "Investor Selling Shareholders") and upto Rs. 25 crores by Other Selling Shareholders.

The offer includes a reservation aggregating up to Rs. 3.00 crores, for subscription by Eligible Employees ("Employee Reservation Portion"). The Eligible Employees are being Offered a discount of Rs. 11 per Equity Share.

Should you subscribe to the Shriram Properties IPO?

The company posted a loss of Rs 60 crore on revenues of Rs 118.2 crore in the six months period ended September 2021. In the financial year ended March 2021, it reported a loss of Rs 68.2 crore against a loss of Rs 86.4 crore in the previous year.

Since the company is a loss making entity there are risks that are involved in investing. Having said that there is so much appetite for IPOs these days, that money eventually gets mopped up. The real estate sector has been a sector where profits are not easy to come by. However, markets are nowhere close to reality. There is so much of liquidity around that IPOs sail through and even offer listing gains. It would not be a surprise if the same also happens with the Shriram IPO. After all, markets are a slave to liquidity.