Casagrand Premier Builder files DRHP for Rs 1,100 crore IPO

Casagrand Premier Builder, one of the largest developers in the residential sector, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) to raise Rs 1,100 crore through an initial public offering (IPO).

The proceeds from the fresh issue, amounting to Rs 150 crore, will be used for the full or partial prepayment or repayment of debt incurred by the company. An additional Rs 650 crore will be allocated for the prepayment or repayment, in full or in part, of certain exceptional borrowings taken by its wholly-owned subsidiaries and step-down subsidiaries, as well as for general corporate purposes, as stated in the filing.

The IPO, with a face value of Rs 2 per equity share, comprises a mix of fresh issues of up to Rs 1,000 crore and an offer for sale of up to Rs 100 crore by promoter-selling shareholders. Under the offer for sale component, the company’s promoters, Arun MN and Casagrand Luxor Private Ltd, will sell their equity shares, each up to Rs 50 crore.

ET first reported the IPO plans in 2021.

Arun MN, Founder and Managing Director, could not be reached for comment.

TheDRHP mentioned that the company, in consultation with the book-running lead managers, may consider a further issue of equity shares through a preferential offer or any other method aggregating up to Rs 200 crores, as pre-IPO placement shall not exceed 20% of the size of the fresh issue. If such placement is completed, the fresh issue size will be reduced.“The offer is being made through the book-building process, wherein not less than 75% of the offer shall be available for allocation on a proportionate basis to qualified institutional buyers, and not more than 15% shall be available for allocation to non-institutional bidders. Not more than 10% of the offer shall be available for allocation to retail individual investors,” it said.Incorporated in 2003, Casagrand has expanded its presence across key micro-markets in Chennai’s residential segment. The firm had approximately 24% market share in terms of launches and around 20% in terms of demand in Chennai from January 1, 2017,to March 31, 2024.

Casagrand has also extended its operations to other 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. It currently has 42 ongoing projects spanning 33.60 million square feet, and 17 upcoming projects with an estimated saleable area of 13.15 million sqft. In FY 2024, it achieved pre-sales volumes of 7.24 million sqft of saleable area.

The company has completed 2.23 million sqft warehousing projects through its former subsidiary, Casa Grande Distripark Private Limited.As of May 2024, it had four additional warehousing projects in Chennai, alongside a commercial office project of 0.59 million sqft acquired in September 2023. Additionally, two other commercial office projects in Chennai, totaling 0.51 million sqft, are under construction.

Casagrand Premier’s revenue from operations increased at a CAGR of 18.02% from Rs 1,876.82 crore in FY22 to Rs 2,613.99 crore in FY 2024. Profit after tax increased from Rs 146.08 crore during the same period to Rs 256.95 crore in FY 2024 at a CAGR of 32.63%.

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