With the IPO market buzzing with too many IPOs, Signature Global India is in the limelight with its upcoming initial public offering scheduled to begin offering on September 20, 2023. It has a particularly strong presence in the affordable real estate sector. His IPO of Signature Global India in the mid-sized housing space has garnered a lot of attention from investors. This in-depth analysis takes a deep dive into SignatureGlobal India IPO and includes key dates, key insights about the company, an assessment of its strengths and weaknesses, and a thorough review and analysis to help investors make an informed decision. Offers.
SignatureGlobal India IPO Details
| IPO start date | September 20, 2023 |
| IPO deadline | September 22, 23 |
| IPO listing date | October 4, 2023 |
| Type of problem | Book Built Issue IPO |
| face value | 1 rupee per share |
| IPO price range | 366 rupees to 385 rupees per share |
| lot size | 38 stocks |
| Exhibition location | BSE and NSE |
| Total publication size | Rs. 730 million rupees |
| Latest issue | Rs. 630 million |
| OFS | Rs. 127 million |
About Signature Global India
Established in 2000, SignatureGlobal (India) Limited is a prominent company in the real estate development industry primarily focused on the Delhi National Capital Region (Delhi-NCR). The company’s core mission is centered around providing affordable, mid-segment housing solutions that address the aspirations of countless individuals for homeownership.
SignatureGlobal (India) Limited’s journey began with the Solera project on 6.13 acres of land in Gurugram, Haryana. Since then, the company has made remarkable progress and has a track record of selling 27,965 residential and commercial units within the Delhi-NCR region. Notably, the company achieved an impressive sales growth CAGR of 42.46%, soaring from Rs. In FY 2021, it amounted to a staggering 16,927.4 million rupees. In 2023, the number will be 34,358,400,000.
The company’s success story is intricately tied to its alignment with government policies such as the Affordable Housing Policy, Deen Dayal Jan Awas Yojana (DDJAY – APHP), 2013; SignatureGlobal (India) Limited is committed to providing ‘value-for-money homes’ that blend attractive design with essential amenities that enhance the living experience.
SignatureGlobal India Limited Financial Snapshot
The financial performance of SignatureGlobal India IPO is as follows:
| Fiscal year end/period end (amount in billions) | ||||
| detail | FY20 | FY21 | FY22 | 23rd year |
|---|---|---|---|---|
| assets | 2930.52 | 3,762.37 | 4,430.85 | 5,999.13 |
| revenue | 263.03 | 154.72 | 939.60 | 1,585.88 |
| Profit after tax | -56.57 | -86.28 | -115.50 | -63.72 |
| net worth | -93.07 | -206.87 | -352.22 | 47.54 |
| reserves and surplus | -128.87 | -210.78 | -364.01 | 34.08 |
| Total loan amount | 969.36 | 1,176.38 | 1,157.53 | 1,709.75 |
subject of the problem
Signature Global India’s IPO size is Rs 730 crore comprising OFS and fresh issue.
- Of the Rs 127 million, the OFS portion will be handed over to the selling shareholders.
- The new issue will be used for the following purposes:
- Repayment or prepayment of certain corporate debt.
- Capital injections into subsidiaries such as Signatureglobal Homes, Signature Infrabuild, Signatureglobal Developers and Sternal Buildcon.
- Inorganic growth through land acquisition and general corporate purposes.
IPO valuation of Signature Global IPO
Since the company is incurring losses, it is not possible to confirm whether the IPO price is undervalued or overvalued.
Positive aspects of SignatureGlobal India IPO
Here are good reasons to invest in this SignatureGlobal India IPO.
- Diverse real estate portfolio: SignatureGlobal India has established a strong reputation in the real estate development sector with a focus on affordable and mid-range housing. The company’s diverse portfolio includes a wide range of housing options and is well-positioned to serve a wide range of homebuyers. This diversity not only strengthens market resilience but also capitalizes on the growing demand for affordable housing.
- Proven sales growth: SignatureGlobal India’s track record reveals consistent sales growth, demonstrating its ability to capture a significant share of the affordable housing market. The company achieved an attractive sales growth CAGR of 42.46%, demonstrating its market presence and future expansion potential.
- Government policy alignment: The company is well-positioned in the affordable housing space due to its strategic alignment with government policies such as the Affordable Housing Policy 2013 and Deen Dayal Jan Awas Yojana (DDJAY – APHP). This strategic approach not only aligns with the government’s goals, but also increases the company’s market visibility.
SignatureGlobal India IPO Risk Factors
When evaluating the potential of Signature Global India’s IPO, it is essential for investors to consider the relevant risk factors. The main risks that prospective investors should be aware of are:
- IPO price uncertainty: The purchase price, price-to-earnings ratio, and market-to-book return multiple based on the IPO purchase price do not necessarily reflect the actual market price of the company’s stock at the time of listing or in the future. Prices fluctuate depending on market conditions and investor sentiment, and may deviate from the IPO valuation.
- Past losses and negative net worth: SignatureGlobal India has experienced net losses and negative net worth in the past. There is a risk that we may not be able to achieve or maintain profitability in the future. This past financial performance highlights the inherent uncertainty in the real estate market.
- Dependence on real estate market: The company’s operations and profitability are highly dependent on the performance of the real estate market in the Delhi-NCR region, particularly in the smaller markets of Gurugram and Sohna in Haryana. Market fluctuations can affect a company’s ability to sell projects at expected prices, which can impact sales and profits.
- Impact of the new coronavirus infection (COVID-19): The COVID-19 pandemic has adversely affected Signature Global India’s business, financial condition, results of operations, cash flows, liquidity and overall results of operations. This remains a risk factor as it may continue to impact demand for the company’s projects.
- Policy changes: Any withdrawal or modification of benefits under government policies such as the Haryana Affordable Housing Policy, 2013 and Deen Dayal Jan Awas Yojna may adversely affect the company’s business, prospects and results of operations. Regulatory changes can have a significant impact on the real estate sector.
- Dependency on housing development: SignatureGlobal India relies heavily on its housing development business, particularly in the affordable housing segment. The success of this division is closely related to the company’s ability to anticipate and respond to consumer demands. Misjudgment or failure in this regard can affect the company’s performance.
- Land price and availability: Increases in land prices or a lack of land available for development could adversely affect our operating revenues, overall business and financial results. Real estate development is highly dependent on the cost and availability of land.
- Land acquisition challenges: A company’s ability to identify and acquire suitable land or enter into cooperation agreements involves risks. Even after conducting due diligence and obtaining an independent title report for a parcel of land, a company may be unaware of legal uncertainties or deficiencies, which may affect its ability to develop and sell projects on such land. may have a negative impact.
SignatureGlobal India IPO – Review and Analysis
SignatureGlobal India IPO offers both opportunities and challenges. Before deciding to invest, consider the following important points:
Pros of SignatureGlobal India IPO:
- Diversified real estate portfolio catering to affordable and mid-segment housing.
- We have achieved consistent sales growth and demonstrated our presence in the market.
- Strategic alignment with government policies increases market visibility.
Cons of SignatureGlobal India IPO:
- uncertainty regarding post-IPO market price;
- Past net losses and negative net worth raise concerns about profitability.
- It is dependent on the Delhi-NCR real estate market and is subject to fluctuations.
- the negative impact of the COVID-19 pandemic on business and demand;
- risks associated with policy changes that affect our earnings and prospects;
- Highly dependent on housing development business and subject to market changes.
- Possible adverse effects from rising land prices and land shortages.
- Challenges in land acquisition and cooperation agreements may hinder growth prospects.
Personally, I would like to stay away from such IPOs for now.
Suresh KP is the founder of Myinvestmentideas. He is a NISM Certified Investment Advisor and he is a NISM Certified Research Analyst. I have been analyzing financial markets for the past 20 years. He can be reached at suresh@myinvestmentideas.com.
