Arkade Developers IPO Review | Apply Or Not ?? | Jayesh Khatri

Summary

This video provides a detailed review of an upcoming IPO opening between September 16th and 19th. The host covers the company's sector, its real estate business in metropolitan areas, and key financial details, such as growth in assets, revenue, and profit margins. The video discusses the company's reasonable valuations, its IPO details, and guidance on whether to invest for listing gains or long-term potential. With insights into subscription, anchor list, and Grey Market Premium (GMP), the video offers clear recommendations for viewers to assess the IPO based on their risk and analysis.

Takeaways

• 📅 The IPO is open between September 16 and September 19.
• 📈 Grey market premium (GMP) is currently at ₹47 per share, but it can fluctuate.
• 🏢 The company operates in the real estate sector, focusing on constructing and redeveloping residential buildings in metro cities, especially in Mumbai.
• 🔢 From 2017 to Q1 2024, the company built 1220 units and sold 1045, with sales depending on location and demand.
• 💼 The company has completed 28 projects, with 11 directly managed and others through partnerships.
• 💰 Financials show strong growth, with assets increasing from ₹370 crore to ₹5575 crore, and revenue rising from ₹237 crore to ₹6635 crore between 2022 and 2024.
• 📊 The company’s profit margin is around 20%, with a net worth of ₹171 crore and a debt-to-equity ratio of 2.1, considered healthy.
• 💹 The company's price-to-earnings ratio (P/E) is 16, which is lower than its competitors, making the valuation reasonable.
• 🏗️ The funds from the fresh issue will be used for ongoing residential projects and land acquisition.
• 🤔 Based on current GMP, anchor list, and valuations, applying for the IPO seems promising for both listing gains and long-term growth.

Q & A

What is the primary focus of the video?

The video reviews an upcoming IPO that will be open from September 16 to September 19. It discusses the company's background, financials, and whether to apply for the IPO.

What are the key aspects of the company being reviewed in the IPO?

The company operates in the real estate sector, focusing on residential projects in metro cities. It engages in both new construction and redevelopment of old buildings.

How is the company's performance in terms of unit sales?

From 2017 to Q1 2024, the company built 1,220 units, of which 1,045 have been sold. Sales often depend on the project's location and demand.

What financial growth has the company seen between 2022 and 2024?

The company's assets grew from 370 crores to 5,575 crores, and revenue increased from 237 crores to 6,635 crores, showing significant growth.

What is the company's profit margin and how has it evolved?

The profit margin stands at approximately 20%, with profits increasing from 50.84 crores to around 1212 crores, representing a 2.5 times growth.

How does the company's valuation compare to its competitors?

The company’s P/E ratio is around 16, which is lower compared to competitors like Macrotech Developers and Godrej Properties, whose P/E ratios range from 40 to 111. This indicates that the company's valuation is more reasonable.

What are the company's plans for the funds raised from the IPO?

The company plans to use the funds for its ongoing residential projects and to acquire new land for future projects.

What are the pros and cons of investing in this IPO?

Pros include the company’s reasonable valuation, strong financial growth, and the positive performance of its sector. A potential con is that the company could have used the funds to pay down debt, which was not mentioned.

Should investors apply for the IPO for listing gains or long-term investment?

The speaker believes the IPO is suitable for both listing gains and long-term investment due to strong growth in the real estate sector and the company's reasonable valuation.

What are the speaker's personal views on applying for this IPO?

The speaker is considering applying for both listing gains and long-term investment due to the company's good performance, reasonable valuation, and strong sector presence.