Is it true that Rustomjee Builders is planning an IPO in the Indian market?

You are right that the Keystone Realtors, owners of the brand Rustomjee Builders, is planning to file its draft red herring prospectus (DRHP) with SEBI shortly. While details are still awaited, the overall issue size is expected to be around Rs1,000 crore while the break-up of fresh issue and OFS or offer for sale is still not known. Rustomjee is a highly respected builder known for its premium range of properties in the Mumbai region.

Recently, Keystone Realtors had raised a sum of Rs170 crore via private placement of shares as part of its pre-IPO round and the issue size is likely to be reduced to this extent. There was participation forthcoming from big names like HDFC, IIFL and the family office of Jagdish Master, who is one of the co-founders of Enam Financials, one of the leading broking and financial services entities based out of Mumbai. Master is a close associate of Nemish Shah and Vallabh Bhansali.

Rustomjee Group has a very strong and robust presence in the Western and Central suburbs of Mumbai with full year sales of Rs2,680 crore during the last financial year. It has an overall development portfolio of nearly 46 million SFT. This portfolio comprises of 20 million SFT of completed projects, 9.2 million SFT ongoing projects and 16.4 million SFT of proposed projects for development in the entire MMRDA region, where it is seen as a premium builder.

Rustomjee may also be looking at the timing of the IPO as apt considering the amalgam of several factors. For instance, residential housing has seen a sharp recovery triggered by factors like historically low interest rates, steady supply of quality projects. In addition, many states like Karnataka and Maharashtra have stimulated demand via waiver of registration fee and stamp duty. Real assets are back in vogue and the time is ripe.

A recent study by Anarock Property Consultants pegs the growth in housing sales in top seven cities at a whopping 71% in the year 2021. While a decant portion of this growth can be attributed to post-COVID recovery, there is also a surge in home demand. IN the recent concluded year, a total of 2.37 lakh units were sold and at the same time the inventory of unsold properties has fallen sharply. MMRDA and NCR are leading this surge and with a strong Mumbai franchise, Rustomjee is perfectly positioned to capitalize on this trend.