Pranav Constructions Submits DRHP to SEBI for Upcoming IPO

Real estate firm Pranav Constructions is preparing for an initial public offering (IPO) as it has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI).

As per the DRHP, the IPO will consist of a fresh issue of equity shares worth up to ₹392 crore, along with an offer-for-sale (OFS) of 2.85 million equity shares by the promoter and investor shareholders. Under the OFS segment, promoter Ravi Ramalingam plans to offload 549,397 equity shares, while investor BioUrja India Infra aims to sell 2,307,472 equity shares.

"Our company, in consultation with the Book Running Lead Managers (BRLMs), may explore a Pre-IPO Placement of up to ₹78.4 crore before filing the Red Herring Prospectus (RHP), at its discretion," stated Pranav Constructions.

Following the IPO, the company's shares are expected to be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

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Purpose of the IPO

Pranav Constructions will not receive any proceeds from the offer-for-sale (OFS), as these funds will go to the selling shareholders after deducting relevant expenses and taxes, as per the DRHP.

However, the company intends to utilize funds raised from the fresh issue to cover costs related to obtaining government and statutory approvals, acquiring additional Floor Space Index (FSI), and compensating members for alternate accommodation and hardship relief for its redevelopment projects, both under construction and upcoming. Additionally, a portion of the proceeds will be directed towards debt repayment, prepayment of certain borrowings, acquisition of future redevelopment projects, and general corporate purposes.

Financial Performance

Pranav Constructions reported a 94.79% increase in net profit to ₹39.62 crore in FY24, compared to ₹20.34 crore in FY23, as per the DRHP. Meanwhile, revenue from operations saw a 26% growth, rising from ₹355.3 crore in FY23 to ₹447.5 crore in FY24.

The company's total expenses also witnessed a 26% increase, reaching ₹410.65 crore in FY24, up from ₹325.36 crore in FY23.

IPO Registrar and Lead Managers

KFin Technologies has been appointed as the registrar for the issue, while Centrum Capital and PNB Investment Services are acting as book-running lead managers.

About Pranav Constructions

Pranav Constructions specializes in real estate development, focusing on MCGM Redevelopment projects in Mumbai’s Western Suburbs. The company boasts 1,503 units and has completed or is currently developing 27 MCGM Redevelopment projects, whereas its competitors have undertaken only 2 to 7 such projects between CY17 and CY24 (as per a C&W Report).

The company follows an integrated redevelopment model, managing projects from initiation to completion with in-house capabilities and resources.