Arkade Developers IPO Full Review | Arkade Developers IPO GMP | Arkade Developers IPO Apply Or Not??

Basic Gyaan

16 Sept 202405:37

Summary

TLDRThe video discusses Rak Developers Limited's IPO, which is open from September 16th to 19th. The IPO is oversubscribed in the first day itself, indicating strong demand. The company, established in 1986, is a real estate development firm with a good reputation in Mumbai's real estate sector. The Indian real estate market is expected to grow rapidly, reaching a trillion-dollar market by 2030, supported by government initiatives. The IPO is priced between ₹120 and ₹128 per share, with a total issue size of ₹10 crore. The funds will be used for ongoing and new projects. The company's financials show impressive growth in revenue and profit after tax in the financial year 2024. The video concludes with a positive opinion on the IPO, considering the company's performance and industry potential.

Takeaways

📅 The IPO of RAKE Developers Limited is open for application from September 16 to September 19.
📈 On the first day, the IPO was oversubscribed in the retail category, indicating high demand.
💰 The current grey market premium (GMP) is around ₹80, suggesting a potential listing gain of approximately ₹6,200 per lot.
🏢 RAKE Developers is a real estate development company founded in 1986, known for construction and redevelopment projects.
🌆 The company is well-established in Mumbai's real estate market and focuses on modern designs and sustainable practices.
🏗️ India’s real estate market is projected to reach $1 trillion by 2030, boosted by government initiatives like the Smart City Mission and affordable housing schemes.
💵 The IPO price band is set between ₹120 and ₹128 per share, with a minimum investment of ₹14,080 for one lot of 110 shares.
📊 RAKE Developers has shown strong financial growth, with assets of ₹575 crore and significant revenue and profit increases in FY 24.
📉 The company’s debt has decreased from ₹150 crore in FY 23 to ₹70 crore in FY 24, a positive sign of financial health.
👍 Based on good financials, high demand, and growth prospects in the real estate sector, the speaker personally favors applying for the IPO but advises watching GMP and subscription levels before the final decision.

Q & A

What is the IPO period for RKE Developers Limited?
-The IPO for RKE Developers Limited is open from September 16th to September 19th.
How was the IPO subscribed on its first day?
-On the first day, the IPO was already oversubscribed more than 8 times in the retail category, indicating high demand.
What is the current Grey Market Premium (GMP) for RKE Developers' IPO?
-The current GMP is around 80, suggesting an estimated listing gain of approximately ₹62 per share.
What type of business does RKE Developers Limited operate in?
-RKE Developers is a real estate development company, involved in constructing new buildings and redeveloping existing ones.
How long has RKE Developers been in the real estate industry?
-RKE Developers has been in the real estate industry since 1986, making it a well-established company with over 35 years of experience.
What is the estimated growth of the Indian real estate market by 2030?
-The Indian real estate market is projected to reach around $1 trillion by 2030, supported by government initiatives like the Smart Cities Mission and Affordable Housing.
What is the price band and minimum investment for the IPO?
-The price band for the IPO is set at ₹120 to ₹128 per share. Each lot contains 110 shares, requiring a minimum investment of approximately ₹14,080.
What are the objectives of the RKE Developers IPO?
-The funds raised from the IPO will be used to develop ongoing projects, acquire new land, and fund future projects.
How has the company's revenue and profit grown over the last few years?
-The company's revenue grew significantly in FY 2024, almost tripling compared to the previous year. The profit after tax also increased from around ₹50 crore in FY 22 and FY 23 to ₹122 crore in FY 24.
What is the debt situation of the company?
-The company reduced its debt from ₹150 crore in FY 23 to around ₹70 crore in FY 24, showing a positive trend in managing its borrowings.
What are the key financial indicators of the company?
-RKE Developers has a healthy ROE, ROCE, and low debt-to-equity ratio of 0.21, along with a profit margin of around 20%. Its P/E ratio is around 16, indicating a fair valuation.
What is the video creator's opinion on applying for the IPO?
-The creator is personally interested in the IPO, citing strong financials, positive market outlook, and high demand. However, they recommend monitoring GMP and subscription rates until the last day before making a decision.

Outlines

00:00

🏢 IPO Overview of Rak Developers Limited

The video discusses the IPO of Rak Developers Limited, which is open from September 16th to 19th. The IPO has already seen a good subscription rate on its first day in the retail category. The video will cover the grey market premium, the company's business details, financials, and the presenter's opinion on whether to apply for the IPO. The current grey market premium is around 80, suggesting a potential listing gain of around 62. The company, Rak Developers, established in 1986, is involved in real estate development with a focus on construction and sustainable practices. It has a good reputation in Mumbai's real estate sector. The Indian real estate industry is growing rapidly, with the market expected to reach 1 trillion dollars by 2030, boosted by government initiatives like Smart City Mission and Affordable Housing. The IPO details include a price band of ₹120 to ₹128 per share, with a total issue size of ₹10 crore, all of which is a fresh issue. The funds from the IPO will be used for ongoing and new projects, including land acquisition. The listing is scheduled for September 24th, and applications can be made until 5:00 PM on September 19th. The video encourages viewers to watch until the end for a complete analysis.

05:01

📈 Financial Performance and IPO Interest

The second paragraph delves into the company's financial performance, showing assets of around 575 crores and a revenue that was consistent in financial years 22 and 23 at 237 crores and approximately 224 crores respectively. However, in financial year 24, the company saw a nearly threefold increase in revenue. The profit after tax also showed good growth, with around 50 crores in the previous two years and approximately 122 crores in financial year 24. The company's debt has decreased, which is a positive sign, and its performance indicators such as the current ratio, debt-to-equity ratio, and profit margin are all healthy, indicating good financial management. The presenter expresses interest in the IPO, considering the good growth in the sector, the company's performance, and the demand for the IPO. They plan to comment on the final day's subscription and GMP in the comments section and encourage viewers to like the video if they found it useful.

Mindmap

Keywords

💡IPO

An Initial Public Offering (IPO) is the process by which a private company goes public by offering its shares to the general public for the first time. In the context of the video, Rak Developers Limited is going public through an IPO, which is a significant event for the company and its investors. The script discusses the IPO's open period, subscription details, and the company's financials in relation to the IPO.

💡Grey Market Premium

The Grey Market Premium refers to the price at which shares of an IPO are traded in the unofficial or 'grey' market before they are listed on the stock exchange. It is an indicator of the demand for the IPO. The video script mentions that the current Grey Market Premium for Rak Developers Limited's IPO is around 80, suggesting strong initial demand.

💡Real Estate Development

Real estate development involves the process of acquiring land, planning, designing, constructing, and marketing of properties. Rak Developers Limited, as mentioned in the script, is a real estate development company that has been operating since 1986, focusing on construction and development projects in Mumbai's real estate sector.

💡Financials

Financials refer to the financial statements and reports of a company, including its assets, liabilities, revenues, and profits. The video script discusses Rak Developers Limited's financial performance, including its assets, revenues, profits after tax, and other financial indicators, which are crucial for investors to evaluate the company's health and potential for growth.

💡Debt to Equity Ratio

The Debt to Equity Ratio (D/E) is a financial metric that shows the proportion of equity and debt used to finance a company's assets. A lower D/E ratio indicates that the company has less debt relative to its equity, which can be a positive sign for investors. The script highlights that Rak Developers Limited has a D/E ratio of 0.21, suggesting a low debt level.

💡Profit Margin

Profit Margin is a financial ratio that measures how much out of every dollar of sales a company retains as net income. A higher profit margin indicates a more profitable company. The video mentions that Rak Developers Limited has a profit margin of around 20%, indicating good profitability.

💡PE Ratio

Price to Earnings Ratio (PE Ratio) is a valuation ratio of a company's current share price compared to its per-share earnings. It is used to determine if a company's stock is overvalued or undervalued. The script indicates that Rak Developers Limited's PE Ratio is around 16, which is considered good as it is below 25, suggesting the stock might be undervalued.

💡Listings

A listing refers to the inclusion of a security (like a stock) on a stock exchange where it can be publicly bought and sold. The video script mentions the timeline for Rak Developers Limited's IPO listing, which is scheduled for September 24th, after the IPO closes on September 19th.

💡Subscription

Subscription in the context of an IPO means the act of applying to purchase shares in the offering. The video script notes that the IPO has been oversubscribed from the first day, indicating a high level of interest from investors in the company's shares.

💡Smart City Mission

Smart City Mission is an initiative by the Indian government to develop sustainable and citizen-friendly urban habitats. The video script mentions this initiative as a factor that could boost the real estate industry, in which Rak Developers Limited operates, by promoting the development of modern and efficient cities.

💡Affordable Housing

Affordable Housing refers to the development of housing projects aimed at providing homes to lower and middle-income groups at a cost they can afford. The video script refers to government schemes promoting affordable housing as a positive factor for the real estate industry, which could benefit companies like Rak Developers Limited.

Highlights

The IPO of RKE Developers Limited is open from 16th to 19th September.

The IPO is oversubscribed on the first day, indicating strong initial demand.

The Grey Market Premium (GMP) is around 80, suggesting potential listing gains.

RKE Developers is a real estate development company established in 1986.

The company operates in two main areas: construction development and affordable housing.

RKE Developers has a good reputation in the Mumbai real estate sector.

The real estate industry in India is growing rapidly, with the market expected to reach $1 trillion by 2030.

Government initiatives like Smart City Mission and Affordable Housing are boosting the industry.

The company's IPO price band is set between ₹120 and ₹128 per share.

The total issue size is ₹100 crore, with the IPO being a pure fresh issue.

The funds from the IPO will be used for ongoing and new projects, including land acquisition.

The company's assets have shown positive growth, with assets of around ₹575 crore in FY24.

Revenue has tripled in FY24 compared to the previous years, showing strong growth.

Profit after tax has also shown significant growth, reaching around ₹122 crore in FY24.

The company's debt has decreased from ₹150 crore in FY23 to around ₹70 crore in FY24.

The company's performance indicators like ROE and ROA are impressive, showing good financial health.

The Debt to Equity ratio is 0.21, indicating a low debt level which is positive.

The company's profit margin is around 20%, which is considered good.

The company's PE ratio is around 16, which is considered good in comparison to the industry.

The presenter is personally interested in the IPO based on the positive financials and strong sector growth.

The final decision on investing in the IPO will be based on the GMP and subscription status on the last day.