Runwal Enterprises
Runwal Enterprises
IPO Size: Rs. 500 cr, entirely Fresh Issue
- To repay Rs. 325 cr of Rs. 2,782 cr gross debt as of 31.7.26
- Unidentified future acquisitions and general corporate purposes
Price band: Rs. 290-305 per share
M cap: Rs. 4,507 cr, implying 11% dilution
IPO Date: Fri 25th Sep to Tue 29th Sep 2026, Listing Mon 5th Oct 2026
Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.
Mumbai-based Real Estate Company
Runwal Enterprises, part of the Subodh Runwal Group (different from older brother Runwal Realty) is a 10 year old realty company, undertaking residential projects in the affordable and mid-income category, having prominent presence in Mumbai’s Eastern suburbs. As of 31.3.26, company has completed 19 projects aggregating 12 million sq ft and has a development pipeline of 76 million sq ft through 28 ongoing projects (20 million sq ft) and 33 upcoming projects (56 million sq ft).
Low Visibility for Future Growth
Sales Value or Booking value is the actual amount sold by a real estate company but is not reflected as revenue in Profit and Loss Account due to real estate accounting norms. Runwal’s Sales Value has remained flat in the past 4 years – at Rs. 2,300 cr in FY22 and in FY26, while dropping to Rs. 1,500 cr in FY24, as the area sold by the company declined from 3.1 million sq ft in FY22 to 2.1 million sq ft. in FY26. Thus, the saviour was rise in average realization from Rs. 7,500 per sq. ft in FY22 to Rs. 11,400 in FY26, which is unlikely to grown further, as most ongoing projects are located in Dombivali (affordable) and Kanjurmarg (mid-income) micro-markets. As these projects near completion, profit growth may slow down.
Decent Margins
FY26 revenue was reported at Rs. 1,799 cr with EBITDA of 16% and PAT of Rs. 186 cr, leading to an EPS of Rs. 16.7. EBITDA margin is better than Mumbai based peers Keystone (8%) and Kalpataru (6%), but even the adjusted EBITDA margin of 33% is lower than the peers Sri Lotus (36%), Suraj (40%).
High Debt and Promoter Holding Pledge
As of 31.3.26, company’s net worth stood at Rs. 1,084 cr while net debt was Rs. 2,634 cr, leading to a net debt to EBITDA ratio of 2.4:1. Post repayment from IPO proceeds and HDFC’s CCD conversion in Aug 2026, net debt to equity ratio will moderate to 1.2:1, but is still high. And so is the net debt to EBITDA ratio of ~5.5x, post listing.
In addition, promoter holding stands at 95%, of which nearly 50% is pledged for company loan.
Other Concerns
Company’s no clear title on 178 acre land in Village Mithagar, Taluka Murud, District Raigad as right to purchase is subject to fulfilment of certain conditions. Its subsidiary’s debt which is sought to be repaid from IPO proceeds has negative networth and its debt is not rated by any credit rating agency.
Fully Priced
M cap of Rs. 4,500 cr and Enterprise Value of Rs. 6,689 cr lead to an EV/EBITDA multiple of 18x and EV/Sales value of 2.8x which is fully valued for a small player with highly leveraged balance sheet and promoter pledge. Also, Mumbai based small cap realtors like Kalpataru, Keystone, Suraj, Arkade are trading between 7-12x EV/EBITDA multiples.