Jaikumar Constructions IPO : 7 things to know
Jaikumar Constructions Ltd, real estate developer focused on the state of Maharashtra, had filed its draft red herring prospectus (DRHP) in June 2021 and SEBI had already given its observations and approved the IPO in September 2021.
However, Jaikumar Constructions Ltd is yet to announce the dates of its IPO. The IPO will be a fresh issue of shares wherein the funds will be used for its ongoing real estate development projects.
7 important things to know about Jaikumar Constructions IPO
1) Jaikumar Constructions Ltd has filed for an IPO with SEBI which comprises entirely of a fresh issue of 79 lakh shares. There will be no offer for sale or OFS component in the issue. However, since the price band for the stock has not been fixed, the size of the fresh issue / IPO and the value of the issue overall is not known as of now.
Jaikumar Constructions Ltd is into planning and executing real estate development projects in smaller but fast growing cities in the state of Maharashtra.
2) As stated earlier, there is no offer for sale (OFS) portion in the Jaikumar Constructions IPO. The entire issue will be by way of a fresh issue only. The value of the fresh issue component will depend on the eventual pricing that the company arrives at for the price band, which is only likely to be fixed closer to the IPO date.
However, the company has disclosed that the company intends to use the fresh funds so raised towards its real estate development projects that are ongoing.
3) The fresh issue portion of 79 lakh, which is also the total issue size, will be used predominantly for utilized for development of Phase 1 of its residential project Parksyde Nest in the fast growing city of Nashik. The city of Nashik is well connected to Mumbai and Aurangabad.
In addition, the funds will also be utilized for further investment in subsidiary for part-financing the construction of "Parksyde Business Avenue".
4) In addition to developing the residential project and the business avenue project of Parksyde, Jaikumar Constructions also plans to use part of the fresh funds to strengthen its capital base and to also reduce its debt to the extent possible.
Apart from some working capital and general expenses allocation, the company also expects to derive the benefits of listing of the equity shares on stock exchanges for better visibility and brand.
5) Jaikumar Constructions Ltd and its subsidiary JREPL have constructed and given possession of close to 6.93 lakhs SFT of development area and 4.50 lakhs SFT of carpet area of residential units. Its ongoing residential projects (Parksyde) will provide an estimated total carpet area of 9.90 lakhs SFT.
Jaikumar Constructions Ltd has focussed on affordable luxury housing in the residential segment and has also developed commercial projects of note in Nashik. Working in its favour is the reputation and track record of developing eco-friendly and luxurious projects with consistency.
6) Jaikumar Constructions Ltd brings some visible strengths to the table. Firstly, the big advantage that the company has is its cash flow visibility. Secondly, the company has a very strong portfolio of ongoing and planned projects; not to forget its strong and valuable land reserves.
The focus on unique architecture and landscaping has been responsible for the popularity of Jaikumar in the Nashik region. Finally, the company has a very niche and prominent presence in the fast growing city of Nashik, which has developed due to its proximity to Mumbai. It has established a positive reputation.
7) The IPO of Jaikumar Constructions Ltd will be lead managed by Aryaman Financial Services and Galactica Corporate Services. They will act as the book running lead managers or BRLMs to the issue.
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