IPO Size: Rs. 792 cr, Entirely Fresh Issue

• To invest Rs. 550 cr in 3 ongoing redevelopment projects

Price band: Rs. 140-150 per share

• Rs. 400 cr pre-IPO placement to UHNIs including Ashish Kacholia, at Rs.150 per share, in Dec 2024

M cap: Rs. 7,331 cr, implying 11% dilution

IPO Date: Wed 30^th Jul to Fri 1^st Aug 2025, Listing Wed 6^th Aug 2025

Grey Market Premium (GMP): We are strongly against ‘grey market premium’ as it is an unofficial figure, against SEBI guidelines.

Mumbai-based Redeveloper

Sri Lotus develops ultra-luxury and luxury residential and commercial properties in Mumbai’s western suburbs, with focus on re-development projects, under an asset-light model, without the need for land purchase. Till date, it has sold 4 lakh sq. ft from 4 projects with company’s promoter having developed 3.3 million sq. ft (through 12 projects under different companies) in past 24 years.

Premium Play

Sri Lotus has 5 ongoing residential projects, aggregating 3 lakh sq. ft saleable area, to be completed by FY28E, with estimated revenue of Rs. 1,800 cr during this period. It also has 11 upcoming projects (8 residential, 3 commercial) aggregating 50 lakh sq. ft. of developable area and 16 lakh sq. ft saleable area, estimated to be completed by FY30E.

Due to presence in premium locations like Versova, Juhu, Andheri West, Bandra, average realisation is one of the highest in the industry, at Rs. 66,000 per square feet, significantly higher than Oberoi Realty’s Rs. 41,000 per sq. ft.

Superior Margins

Booking value rose 33% YoY to Rs. 463 cr in FY25, with EBITDA margin jumping to 54%, from 32% in FY24, as EBITDA nearly doubled YoY to Rs. 308 cr in FY25. As 90% of upcoming projects are re-development projects, high margins look sustainable. Also, these are core business margins, without annuity income, unlike some of the other real estate companies like Oberoi Realty having 58% EBITDA margin. Rs. 400 cr Pre-IPO placement proceeds helped pare debt, with company now being net debt free, having Rs. 260 cr surplus.  

In-line Pricing for Small Operations

Market cap of Rs. 7,331 cr and enterprise value (EV) of Rs. 7,073 cr lead to an EV/booking value multiple of 15x and an EV/EBITDA multiple of 19x, based on FY26E EBITDA of about Rs. 380 cr. Sri Lotus’ EV/booking value multiple is higher than peers but EV/EBITDA, which is the profitability matrix, is comparable:

• Mumbai’s cash rich realtor Oberoi Realty is trading at EV of Rs. 11 cr per sq ft and EV/EBITDA of 21x, although it is 10x in size, with 58% EBITDA margin.
• Larger peer Lodha Developers is ruling at an EV of Rs. 7 cr per sq. ft, with EV/EBITDA multiple of 28x, despite 0.2:1 net debt to equity and 1x net debt to EBITDA ratio.
• Keystone Realtors has an EV of Rs. 7,900 cr, with negligible debt, Rs. 470 cr EBITDA in FY25, and 41% YoY rise in pre-sales, implying EV of Rs 2.6 cr/sq ft and 15x EV/EBITDA.
• Suburban Mumbai based realtor Arkade, which listed a year ago, with not much debt, has Rs. 3,700 cr EV for Rs. 200 cr EBITDA, implying an EV/EBITDA multiple of 18x and EV/sq ft of Rs. 5 cr.
• Suraj Estate, undertaking redevelopment in Central and South Mumbai, with Rs. 50,000 average realization per sq. ft, is ruling at an EV of Rs. 3.6 cr per sq. ft, with EV/EBITDA of 9x, having 0.5:1 debt equity ratio. Suraj’s share price had surged post its IPO in Dec 2023, but has since halved, now ruling below IPO price.

Thus, Sri Lotus’ redevelopment model, cash rich position, superior margin and booming real estate sector justify the IPO pricing, especially on earnings basis. Also, IPO is being undertaken at the same price as pre-IPO 7 months ago.