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Signature Global launches Rs 730 cr IPO; to use fund for debt reduction, biz expansion

Realty firm Signature Global on Wednesday launched its initial public offer (IPO) to raise Rs 730 crore, which will be used mainly for debt reduction and business expansion.

The public issue will close on September 22. The price band has been fixed at Rs 366-385 per share.

The total size of the IPO is up to Rs 730 crore, comprising a fresh issue of shares worth up to Rs 603 crore and an offer for sale (OFS) of up to Rs 127 crore.

Delhi-NCR-based Signature Global has already raised Rs 318.5 crore from anchor investors, including Nomura.

In a regulatory filing late Monday, Signature Global informed that under the Anchor Investors (AIs) portion in the public issue, 82,72,700 equity shares have been subscribed at Rs 385 per equity share.

The Nomura Trust and Banking Co Ltd bought a maximum of 18,70,094 shares.

Kotak Mahindra Trustee Co Ltd, Kotak India EoQ Contra Fund, Quant Mutual Fund, Nippon India Equity Opportunities AIF, Bandhan Core Equity Fund, Morgan Stanley Asia, Societe Generale, BNP Paribas Arbitrage and Goldman Sachs Singapore are among other anchor investors.

Signature Global– backed by HDFC Capital and IFC — had in July last year filed the draft red herring prospectus (DRHP) with capital markets regulator Sebi to launch its IPO.

According to the red herring prospectus (RHP) filed recently, the bulk of the proceeds will be used to reduce debt.

“Our net debt stood at around Rs 1,100 crore at the end of the last fiscal year. We propose to utilise Rs 432 crore for debt reduction,” Signature Global Chairman Pradeep Aggarwal told reporters recently.

The balance fund will be used for inorganic growth through land acquisitions and general corporate purposes.

At present, the promoter group holds a 78.35 per cent stake in the company. Their shareholding will come down to around 69-70 per cent in the company post-listing.

Through OFS, International Finance Corporation is selling its shares partly. At present, IFC holds a 5.38 per cent stake in the company.

On the operational front, Signature Global achieved 32 per cent growth in its sales bookings at Rs 3,430.58 crore in the last fiscal on strong housing demand.

Signature Global, which focuses on the affordable and mid-income housing segment, had clocked Rs 2,590 crore worth of sales bookings in the preceding fiscal.

Signature Global’s collection from customers rose to Rs 1,920 crore last fiscal from Rs 1,282.14 crore a year ago.

It launched 6.21 million square feet area during 2022-23 against 4.21 million square feet in the year-ago period.

Signature Global delivered 4.01 million square feet area last fiscal, up from 3.03 million square feet in the preceding fiscal.

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As per the RHP, the company’s total income rose to Rs 1,585.87 crore last fiscal from Rs 939.60 crore a year ago.

The net loss has narrowed to Rs 63.71 crore in 2022-23 from Rs 115.5 crore in 2021-22.

Signature Global commenced operations in 2014.

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As of March 31, 2023, it has sold 27,965 residential and commercial units, all within the Delhi NCR region, with an aggregate saleable area of 18.90 million square feet.

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