PE-backed firms Shriram Properties, GR Infraprojects get SEBI nod for IPOs

 PE-backed firms Shriram Properties, GR Infraprojects get SEBI nod for IPOs

Shriram Properties Ltd and GR Infraprojects Ltd have received regulatory approval to float their initial public offerings that would allow their private equity backers to clock exit deals.

The Securities and Exchange Board of India give its final observations to the IPO proposals of the two companies last week, according to information available with the capital markets regulator.

Both companies had filed their draft offer documents in April.

Bengaluru-based developer Shriram Properties, part of the diversified conglomerate Shriram Group, plans to raise Rs 250 crore in fresh capital to repay debt, according to its draft prospectus.

PE firms TPG Asia, Tata Capital and Walton Street Capital, and some individual shareholders will together sell shares worth Rs 550 crore. This takes the total IPO size to Rs 800 crore ($106.6 million).

TPG has proposed to sell shares worth Rs 150 crore while Tata Capital will take home an estimated Rs 160 crore and the local affiliate of Chicago-based Walton Street will fetch Rs 216 crore, The Capital Quest reported previously.

This is Shriram Properties’ second attempt to go public. It had previously filed a draft IPO prospectus in December 2018 and received SEBI’s approval in April 2019 but deferred its plans owing to unfavourable market conditions.

Shriram Properties ranks among top five real estate developers in southern India, and focusses on the mid-market and affordable housing segments.

Axis Capital, ICICI Securities and Nomura Financial Advisory and Securities (India) are merchant bankers arranging and managing the share sale.

Meanwhile, the GR Infraprojects IPO comprises a secondary market sale of nearly 11.51 million shares by its controlling shareholders and Motilal Oswal Private Equity. The PE firm will offload its entire stake of 9.9% and is estimated to fetch about Rs 750-830 crore, beating benchmark returns.

The PE firm will stand to make about 15-17 times return on its original investment. This translates into an annualized return of 30-33% in rupee terms, excluding dividend income, as per The Capital Quest’s estimates.

The total IPO size is pegged at Rs 900-1,000 crore ($120-134 million), The Capital Quest reported earlier.

This is the third attempt by GR Infraprojects to go public. It first tried to go public in September 2016 and then again in May 2018 but did not pursue the plans.

HDFC Bank, ICICI Securities, Kotak Mahindra Capital Co., Motilal Oswal Investment Advisors, SBI Capital Markets, and Equirus Capital comprise the merchant banking syndicate that will arrange and manage the share sale.

Sumit Upadhyaya

The Capital Quest