InvestorQ : Can you tell me the background of the Square Yards IPO and how the company will use the funds?
vaishnavi mhatre made post

Can you tell me the background of the Square Yards IPO and how the company will use the funds?

vidhya Laxmi answered.
5 months ago

Square Yards is a PropTech company. As the name suggests, PropTech essentially operates at the confluence of property services by leveraging extensively on technology and digital interfaces and platforms. PropTech companies typically leverage technology for bringing buyers and sellers together, for transactions, for execution and fulfilment, for content, monitoring and for providing a host of aligned services.

Square Yards, one of India’s popular PropTech companies based out of Gurugram will be shortly filing its draft red herring prospectus (DRHP) to raise Rs.1,500 crore via public issue. This IPO is largely intended to bankroll its future growth and expansion plans. The company will be looking at a combination of a fresh issue and an offer for sale. While Square Yards has finalised investment bankers for its proposed issue, the details are awaited.

Square Yards is based out of Gurugram and this area has emerged as one of the fastest growing property markets in India in the Delhi-NCR region. This IPO is not only intended to give partial exit to some of its promoters and early backers but will also provide a listing presence in the stock markets enabling the company to use its equity as currency for future inorganic growth leveraging.

Square Yards business model is split into 3 verticals viz. property brokerage, home loan brokerage and rental businesses. Square Yards offers the complete suite of PropTech services comprising real estate prospecting, property comparison, shortlisting, discovery, funding, transaction execution and follow-up supportive services. These include home interiors, property management and post-sales services.

It reported sales revenues of Rs.250 crore in FY21 while it continues to make losses due to heavy upfront investments in infrastructure and marketing. In terms of business undertaken, Square Yards has facilitated property sales worth Rs.6,100 crore and arranged home loans worth Rs.1,900 crore. While benchmarks are not available, had recently been valued at $1 billion. That can be an approximate benchmark