Suraj Estate Developers Limited IPO – Get Date, Price, Review and Details

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In this ariticle, we will discuss:

• About the company
• Objects of the Offer
• Key Strengths and Opportunities
• Risks
• Financial Snapshot

About the company:

Suraj Estate Developers Ltd. has a major residential portfolio located in the markets of Mahim, Dadar, Prabhadevi and Parel, which are the sub-markets of the South-Central Mumbai micro-market where it has established its presence and is one of the market leaders in these locations. It is among the top ten developers as per supply (in number of units). Out of the top ten developers, it ranks first with a 15.92% market share. Further, it is also among the top ten developers as per absorption (in number of units) where it ranks first with a 16.99% market share. Suraj Estate Developers has been involved in the real estate business since 1986, and develops real estate across the residential and commercial sectors in the South-Central Mumbai region. The company is now venturing into residential real estate development in the Bandra submarket.

In the residential portfolio, Suraj Estate Developers is present across the “value luxury” and “luxury” segments across multiple price points with unit values ranging from ₹10.00 million to ₹130.00 million. In the commercial portfolio, it has constructed and sold built-to-suit corporate headquarters to its institutional clientele.

Objects of the Offer:

The company intends to utilize the net proceeds from the fresh issue towards the following objects:

• Repayment/Prepayment of the aggregate outstanding borrowings of the Company and its Subsidiaries, Accord Estates Private Limited, Iconic Property Developers Private Limited and Skyline Realty Private Limited
• Acquisition of land or land development rights; and
• General corporate purposes.

Key Strengths and Opportunities:

• Established brand with a long-standing presence in the Value Luxury Segment and Luxury Segment in the residential real estate market of South Central Mumbai region: Most of the completed, ongoing and upcoming Projects of Suraj Estate Developers are under the Value Luxury and Luxury Segments and are majorly located in and around South Central Mumbai region. The South Central Mumbai region is an attractive real estate market in terms of high realisation, aspirational value/premium product positioning and high demand across multiple segments and price points. The company is well positioned to leverage its established presence and longstanding operations in the South Central Mumbai region to capitalize on the significant demand for real estate projects across various price points.
• Diversified portfolio encompassing product offerings across various price points in value luxury and luxury segments: Suraj Estate Developers Ltd. has a diversified portfolio of residential developments, spread across price points, unit sizes and micromarkets in the South Central Mumbai, catering to a wide spectrum of economic and demographic segments, from value luxury to luxury residences. Its ability to cater to the needs of customer across income brackets through a range of differentiated products offerings, supported by its technical and execution capabilities has enabled it to successfully grow its business.
• Strong expertise in tenant settlement in the redevelopment projects: From 1986 to 2023, the company has completed 42 residential and commercial projects out of which 41 projects (97.62%) are redevelopment projects. Since most of the land parcels in the South Central Mumbai market are in the nature of redevelopment projects, tenant settlement is a key element for unlocking value on land parcels. Due to the track record of providing good quality free-housing to the tenants/ occupants, the company is the preferred developer even amongst the tenants in the South Central Mumbai region.
• Experienced promoters and management team: The promoter of Suraj Estate Developers Ltd., Rajan Meenathakonil Thomas, has over thirty-six years of experience in various aspects of the real estate business. The leadership team also consists of Rahul Rajan Jesu Thomas, a Whole-time Director with over sixteen years of experience in various aspects of real estate business along with other professionals, each having vast experience across different industries. The knowledge and experience of its Promoter and Whole-time Director, along with Key Managerial Personnel, senior management and team of skilled personnel, provide it with a significant competitive advantage.

Risks:

• The business of Suraj Estate Developers Ltd. is dependent on the performance of, and the conditions affecting, the real estate sub-markets in the South-Central Mumbai region. As of October 31, 2023, it did not have any ongoing projects in any other areas apart from South Central Mumbai. Consequently, it is exposed to risks from economic, regulatory and other changes as well as natural disasters in the South Central Mumbai region, which in turn may have an adverse effect on the business, results of operations, cash flows and financial condition.
• Any uncertainty in the title to the real estate assets could have a material adverse impact on the current and future revenue. While the company typically obtains independent title reports for the land relating to its project and has obtained such reports with respect to its Land Reserves, it may not be able to assess or identify all the risks and liabilities associated with such land, such as faulty or disputed title, unregistered encumbrances or adverse possession rights. As a result, the uncertainty of title makes land acquisition and real estate development projects more complex and may impede the transfer of title, expose it to legal disputes and adversely affect the valuation of the land involved.
• Any Inability to complete the ongoing projects and upcoming projects by their respective expected completion dates or at all could have a material adverse effect on the business, results of operations and financial condition of Suraj Estate Developers Ltd.
• As of October 31, 2023, the company has a total of 216 unsold units in its ongoing projects. If the company is not able to sell its project inventories in a timely manner, then it may adversely affect the business, results of operations and financial condition.

Financial Snapshot: