Chennai-based realtor Casagrand files DRHP for ₹1,100 crore IPO

Casagrand Premier Builder, the Chennai-based developer in the residential sector, has filed its draft red herring prospectus (DRHP) with the market regulator Securities and Exchange Board of India (SEBI) to raise ₹1,100 crore through an initial public offering (IPO).

The company has a market share of 24 per cent in terms of launches and approximately 20 per cent in terms of demand during the period January 1, 2017 to March 31, 2024, says a release.

The IPO, with a face value of ₹2 per equity share, is a mix of a fresh issue of up to ₹1,000 crore and an offer for sale of up to ₹100 crore by Promoter Selling Shareholders.

Incorporated in 2003, under the leadership of MN Arun, Casagrand has expanded its presence across key micro-markets in Chennai (Tamil Nadu), offering a diverse range of residential projects. These include apartments of various sizes and independent villas catering to luxury, mid-range, and affordable segments under the “Casagrand” brand, focusing on mid-range offerings. 

The offer for sale consists of equity shares up to ₹50 crore each by Arun MN and Casagrand Luxor Private Ltd. The company may consider a further issue of equity shares through a preferential offer or any other method aggregating up to ₹200 crores, as pre-IPO placement shall not exceed 20 per cent of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced, the release said.

The offer is being made through the book-building process, wherein not less than 75 per cent of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, not more than 15 per cent shall be available for allocation to non-institutional bidders, and not more than 10 per cent shall be available for allocation to retail individual investors.

The proceeds from the fresh issue to the extent of ₹150 crore will be used for prepayment or repayment, in full or in part, of all or a portion of certain outstanding borrowings availed by the company; ₹650 crore for prepayment or repayment, in full or part, of all or a portion of certain exceptional borrowings availed by its wholly owned subsidiaries.

Casagrand is also in South Indian cities like Bengaluru, Hyderabad and Coimbatore.

As of May 31, 2024, the company had completed 101 projects with a saleable area of 21.45 million sq ft, was working on 42 ongoing projects spanning 33.60 million sq ft, and had 17 upcoming projects with an estimated saleable area of 13.15 million sq ft. In FY 2024, it achieved pre-sales volumes of 7.24 million square feet of saleable area.

As of May 31, 2024, Casagrand has a sales team of 825 people and opened an office in Dubai in November 2016 to serve NRIs interested in properties across its operational cities.

The company also has a history in warehousing through its former subsidiary, Casa Grande Distripark Private Limited. In 2018, it completed two projects in Chennai at Mappedu and Mahindra World City Industrial Park, covering a total leasable area of 2.23 million square feet.

As of May 2024, it had four additional warehousing projects in Chennai, and a commercial office project of 0.59 million square feet was acquired in September 2023. Two other commercial office projects in Chennai, totalling 0.51 million square feet, are under construction.

Casagrand Premier’s revenue from operations increased at a CAGR of 18.02 per cent from ₹1,876.82 crore in Fiscal 2022 to ₹2,614 crore in Fiscal 2024. Profit after tax increased from ₹ 146 crore in Fiscal 2022 to ₹ 257 crore in Fiscal 2024 at a CAGR of 32.63, the release said.

JM Financial Limited and Motilal Oswal Investment Advisors Limited are the book-running lead managers for the issue, and KFin Technologies Limited is the registrar for the offer.