Kalpataru IPO to open on June 24: Check price band, objectives, financials and key details

Kalpataru Limited, a prominent real estate developer in the Mumbai Metropolitan Region (MMR) will launch its ₹1,590 crore initial public offering (IPO) on June 24. The IPO will remain open for subscription till June 26. The IPO is a completely fresh issue of 3.84 crore shares.

Incorporated in 1988, Kalpataru Limited focuses on luxury, premium, and mid-income residential, commercial, and retail projects, integrated townships, lifestyle gated communities, and redevelopments.

As per the company, it is the 5th largest developer in the MCGM region and the 7th largest developer in Thane, Maharashtra, in terms of units supplied between 2019 and December 31, 2024. The company also operate in Pune, Hyderabad, Bengaluru, Indore, and Jodhpur.

The company is part of the Kalpataru Group, established in 1969 by Mr. Mofatraj P. Munot. The group has a multinational presence with operations in 75 countries in segments like power transmission and distribution, oil and gas, railways, and civil infrastructure projects. One of its group companies, Kalpataru Projects International Limited, is already listed on the NSE and BSE.

Kalpataru IPO details

Kalpataru Limited IPO aims to raise ₹1,590 crore through its public issue. The IPO is a fresh issue of over 3.84 crore shares with no offer for sale component.

The company has fixed the price band of the issue at ₹387 to ₹414 per share. The lot size, or the minimum bid quantity to apply for the issue, is 36 shares. This equates to a minimum investment amount of ₹14,904 per lot at the upper end of the price band for retail investors.

Kalpataru Limited has appointed ICICI Securities Limited, JM Financial Limited, Nomura Financial Advisory And Securities (India) Pvt Ltd as book-running lead managers of the IPO, while MUFG Intime India (Link Intime) is the registrar for the issue.

Kalpataru IPO: Important dates

Kalpataru IPO will remain open for bidding from 24 to 26 June. After the bidding is closed, the allotment of shares is expected to be finalised on Friday, June 27.

Successful bidders can expect the shares to be credited to their demat accounts by June 30, with others receiving refunds on the same day. Kalpataru shares are scheduled to list on the BSE and NSE on July 1.

Kalpataru Limited IPO Objective

• Repayment of borrowing (75%): The company will use ₹1,192.5 crore to repay borrowings availed by it and its subsidiaries.
• General corporate purposes (25%): Part of the IPO proceeds will be used for general corporate purposes.

Financial snapshot

About the company

Kalpataru Limited has completed 120 projects totalling over 25.87 million square feet (msf) of developable area across multiple cities as of December 31, 2024. The company has 36 ongoing, forthcoming projects, comprising 48.97 msf of developable area, with 25 ongoing projects (24.83 msf), 6 forthcoming projects (16.33 msf), and 5 planned projects (7.81 msf). The company sold 1,407 units covering 2.05 msf of saleable area and collected ₹2,621 crore in sales during the first nine months of FY25.

The company majorly operates in the MMR, which commands the largest market share among India's top seven cities, with an average 31% share in supply and 32% in absorption. With pan-India inventory overhang declining to just 14 months in 2024, the lowest in 6-7 years, and absorption consistently outpacing supply since 2021, which is optimal conditions for the established developers like Kalpataru Limited.

Strengths and opportunities

• Dominant MMR market position: The company is the 5th largest developer in the MCGM region and the 7th largest in Thane by units supplied (CY19-Dec2024), with a presence across all micro-markets in the MMR. The company has 73 completed projects totalling 15.03 msf of developable area, with 93.63% concentrated in the premium MMR and Pune markets.
• Premium brand command & pricing power: The "Kalpataru" brand, backed by 55 years of group legacy, enables significant pricing premiums of 2-29% over sub-market averages across locations. This strong brand recognition facilitates exceptional pre-sales performance, with 94.74% average sales achieved before occupancy certificates and 60.25% sales within the first year of project launches.

Risks and Threats

• High dependency on Mumbai-Pune markets: 94.84% of real estate projects are concentrated in the Mumbai Metropolitan Region (MMR) and Pune as of Dec 2024. Limited geographic diversification exposes the company to localised risks, including natural disasters, political changes, and regulatory shifts.
• Project execution delays: Long gestation periods with multiple ongoing projects showing extended timelines. Several projects have been running for 5-9 years (e.g., Amoda Reserve: 9 yrs 9 months). Risk of RERA penalties and customer litigation due to delivery delays.