Runwal Enterprises Moves Closer To Mainboard IPO; Files DRHP For Rs 1,000 Cr Public Issue

Runwal Enterprises Limited, a real estate company located in Mumbai, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in an attempt to raise funds of Rs 1,000 crore through an initial public offering (IPO). With a face value of Rs 2 per share, the IPO is a fresh issue of Rs 1000 crore that does not include an offer-for-sale element.

A pre-IPO placement of specific securities up to Rs 200 crores may be considered by the firm in collaboration with the book-running lead managers, provided that the pre-IPO placement does not exceed 20% of the size of the fresh offering. The size of the new issue will be minimized if such positioning is completed. Eligible employees can reserve a subscription through it, and those who bid in the employee reservation section will receive a discount.

A minimum of 75% of the net issue will be proportionately available for allocation to qualified institutional buyers, 15% or less of the offer will be available for allocation to non-institutional bidders, and at least 10% of the offer will be available for allocation to retail individual bidders.

Rs 450 crore will be invested in its material subsidiaries, Susneh Infrapark Private Limited, Runwal Residency Private Limited, and its subsidiary, Evie Real Estate Private Limited, for the purpose of repaying or prepaying all or a portion of their outstanding borrowings; funding the acquisition of future real estate projects; and using the proceeds of its fresh issuance to the extent of Rs 200 crore for repayment or prepayment, in full or in part, of certain outstanding borrowings obtained by the company.

From Rs 229.49 crore in FY 2023 to Rs 662.19 crore in Fiscal 2024, Runwal Enterprises' restated consolidated revenue from operations climbed by 188.55%, mostly as a result of higher sales of residential units in a few towers of the Runwal Gardens project, which was carried out by the company's wholly-owned subsidiary, Runwal Residency Private Limited. The company earned a profit of Rs 107.28 crore in FY24 after a net loss in FY23.

The restated consolidated revenue from operations and profit after tax for the six months that concluded on September 30, 2024, were Rs 270.52 crore and Rs 25.53 crore, respectively.

The IPO's registrar is MUFG Intime India Private Limited, while the book-running lead managers are ICICI Securities Limited and Jefferies India Private Limited. The company has proposed that the equity shares will be listed on the NSE and BSE.

Runwal Enterprises Limited is a Mumbai-based real estate company that specializes in residential projects in addition to commercial buildings, shopping centers, and educational facilities. According to a JLL report cited in the DRHP, Runwal Enterprises is a well-known brand in the sector with a significant presence in Mumbai. With market shares of 5.69% and 5.25%, respectively, between January 2019 and September 2024, Runwal Enterprises is ranked second in terms of new launches and sales as of September 30, 2024. It has finished 15 projects at that time, and there are 25 continuing and 32 planned developments.

With 17.63% of total sales and 20.84% of new releases within the same time period, it leads the Kalyan-Dombivli submarket in the eastern suburbs of Mumbai (Source: JLL Report). As of September 30, 2024, Runwal Enterprises' residential portfolio includes completed projects, ongoing projects, and upcoming projects totaling 48.71 million square feet of developable area and estimated developable area.