Muted debut: Macrotech Developers trades at 2.5% discount, what should be the strategy now?

Shares of Macrotech Developers, formerly known as Lodha Developers made a tepid listing on Monday. Shares of the real estate developer opened at Rs 436 per share on the National Stock Exchange, Rs 50 lower than the issue price of Rs 486 marking a discount of 10.29%. On the BSE, it opened at Rs 439, at a discount of 9.67%.

In afternoon trades, the share was rebounded from the opening price and was quoting at Rs 473.75 losing 2.5% or Rs 12.25 from its issue price. It made an intraday high of Rs 478 and a low of Rs 422.60.

Commenting on the muted listing Rajesh Agarwal, Head of Research at Aum Capital Markets is of the opinion that investors should book losses and exit the counter. “As the sector is bit risky and market conditions are not conducive and the company has huge debt,” said Agarwal

Macrotech Developers (Lodha) is one of the largest real estate developers in India, by residential sales value for the financial years 2014 to 2020. Its core business is residential real estate developments with a focus on affordable and mid-income housing.

“The Macrotech Developers has a substantial amount of debt and contingent liabilities and the impact of covid on the business is still uncertain. Moreover, the company is hugely focused on MMR region which is worstly affected by the covid, hence we advise the investors of this IPO to exit,” said Saurabh Joshi – Research Analyst from Marwadi Shares and Finance

This was the third attempt by Lodha Developers to launch a public issue and list its shares on the stock exchanges. In 2009 and 2018, the company had filed IPO documents and also got Sebi approval but did not hit the capital market as market conditions were not conducive.

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