Kalpataru IPO Opens June 24; 2% Grey Market Premium Signals Cautious Optimism

Shares of Mumbai‑based real estate developer Kalpataru Projects International Ltd. are trading at a 2.17% grey market premium (GMP)—about ₹9 above the upper IPO price band—prior to the public issue opening on Tuesday, June 24. This 2% GMP signals measured investor interest, with expectations of a moderate listing premium.

IPO Structure & Key Details

• IPO Size: ₹1,590 crore
• Issue Type: Entirely a fresh issue (no Offer-for-Sale component)
• Price Band: ₹387–₹414 per share
• Lot Size: 36 shares per lot (₹13,932 at lower band to ₹14,904 at upper band)
• Share Allocation: 50% QIBs | 35% RIIs | 15% NIIs
• Anchor Date: June 23, 2025
• Subscription Period: June 24–26, 2025
• Allotment Date: June 27, 2025
• Listing Date: Tentatively July 1, 2025 on BSE & NSE

About Kalpataru Projects International

Kalpataru Projects International is a leading real estate developer primarily active in the Mumbai Metropolitan Region, and newer markets such as Pune, Hyderabad, Bengaluru, and Indore. A subsidiary of the broader Kalpataru Group, it builds residential, commercial, and township projects—with 70 completed and 40 ongoing developments. Notably, it posted a PAT of ₹5.51 crore in the nine months ending December 2024, rebounding from prior losses.

Use of IPO Proceeds

• Debt Reduction: ₹1,192.5 crore earmarked for repayment/prepayment of outstanding borrowings.
• Corporate Purposes: Remaining funds allocated towards working capital, land acquisition, and general corporate needs.

This capital strategy aims to deleverage the company and free up resources for future expansion.

GMP Insights: A Modest Premium

The current GMP of ₹9 per share (~2.17%) indicates muted but positive investor sentiment ahead of the listing. While not aggressively high, this suggests that investors expect at least a marginal premium—reflecting cautious optimism in the real estate segment.

Unlike the 18–20% GMP seen in other IPOs this week (e.g., Globe Civil Projects), Kalpataru’s restrained premium may imply tempered demand—possibly due to its higher price band or performance-related uncertainties.

Should You Apply?

Reasons to Apply:

1. Pure Fresh Issue: Entire proceeds fuel growth and reduce debt—supporting a stronger balance sheet.
2. Recovering Profitability: After years of losses, the firm turned profitable in FY24 with ₹5.51 crore PAT in nine months to December 2024.
3. De-leveraging Approach: A large chunk of IPO proceeds directed to bond repayment is a prudent financial move.

Risks:

• High Borrowings: Outstanding debt of over ₹11,000 crore as of Dec 2024.
• Market Sentiment Fluctuations: Real estate remains sensitive to broader economic trends and interest rates.
• Execution Risks: Project delays or regulatory challenges can affect returns.

Given the limited UPSIDE—reflected in the modest GMP—investors aiming for long-term value in real estate might consider cautiously subscribing, especially if valuations align with their risk profiles.

IPO Snapshot

Investor Takeaways

• Grey Market Clue: A 2% GMP indicates modest listing expectations—not a strong premium.
• Strategic Equity Raise: Zero dilution for promoters and clean capital usage increase investor appeal.
• Balanced Risk–Reward: With turnaround underway and debt on the radar, the issue carries potential if macro trends remain favorable.

Disclaimer:
This article is for informational purposes only and does not constitute investment advice, recommendation, or solicitation to buy or sell any securities. Investors are advised to consult a certified financial advisor and carefully read the Red Herring Prospectus (RHP) and other related documents before making any investment decisions. The mention of GMP (Grey Market Premium) is indicative and unofficial, and should not be solely relied upon. Stock market investments are subject to market risks. Past performance is not indicative of future results.

Also Read: Globe Civil Projects IPO Opens June 24; 18% GMP Reflects Strong Demand