Mumbai-based real estate giant Runwal Enterprises Limited has filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), aiming to raise ₹1,000 crore through an initial public offering (IPO). The offering comprises a fresh issue of ₹1,000 crore with a face value of ₹2 per share and does not include any offer-for-sale component.
IPO Details and Objectives
The IPO will be carried out through the book-building process, where:
- At least 75% of the net issue will be allocated to qualified institutional buyers (QIBs).
- Not more than 15% will be available to non-institutional bidders (NIIs).
- Not less than 10% will be reserved for retail individual investors (RIIs).
The company may also consider a pre-IPO placement of up to ₹200 crore, not exceeding 20% of the fresh issue size. In such a case, the size of the fresh issue would be reduced accordingly. Additionally, the IPO will include a reservation for eligible employees with a discount on the employee reservation portion.
Utilization of Funds
The proceeds from the IPO will be used as follows:
- Debt Repayment: ₹200 crore for repayment or prepayment of certain outstanding borrowings.
- Subsidiary Investment: ₹450 crore to fund its material subsidiaries—Susneh Infrapark Private Limited, Runwal Residency Private Limited, and Evie Real Estate Private Limited—for debt repayment and real estate project investments.
- Future Projects and General Corporate Purposes: Remaining funds will support future real estate acquisitions and general corporate expenses.
Runwal Enterprises: A Real Estate Powerhouse
Runwal Enterprises is a well-known brand in the Mumbai real estate market, specializing in residential projects spanning affordable, mid-income, and luxury segments, along with commercial spaces, retail malls, and educational buildings. The company has established a robust presence, particularly in Mumbai’s eastern suburbs, where it holds the top position in the Kalyan-Dombivli submarket.
According to a JLL Report, the company ranks second in new launches and sales between January 2019 and September 2024, with market shares of 5.69% and 5.25%, respectively. The developer has completed 15 projects, with 25 ongoing and 32 upcoming developments. The total developable area of completed, ongoing, and upcoming projects stands at 48.71 million square feet as of September 30, 2024.
Diversifying Portfolio and Growth
Initially focused on affordable and mid-income housing, Runwal Enterprises has expanded into the luxury housing segment, with landmark developments like 7 Mahalaxmi. The company’s flagship residential projects include Runwal Gardens in Dombivli and Runwal Greens in Mulund West. More recently, it has widened its footprint beyond the eastern suburbs, moving into Mahalaxmi and Bandra.
Financial Performance
Runwal Enterprises has showcased remarkable financial growth, reporting a 188.55% increase in revenue from ₹229.49 crore in FY23 to ₹662.19 crore in FY24. The surge was driven mainly by revenue from the sale of residential units at the Runwal Gardens project, undertaken by its subsidiary Runwal Residency Private Limited. The company turned profitable, recording a net profit of ₹107.28 crore in FY24, compared to a loss in FY23. For the six months ending September 30, 2024, it posted revenue of ₹270.52 crore and a profit of ₹25.53 crore.
IPO Management and Listing
ICICI Securities Limited and Jefferies India Private Limited are the book-running lead managers for the IPO, while MUFG Intime India Private Limited is the registrar. The equity shares are proposed to be listed on BSE and NSE.
With this IPO, Runwal Enterprises aims to strengthen its financial position, expand its real estate portfolio, and capitalize on growth opportunities in Mumbai’s booming property market.
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