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Keystone Realtors makes quiet debut, but analysts see long-term value

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Keystone Realtors, which runs the real estate brand Rustomjee, made a quiet debut on the bourses, with its shares listed at Rs 555, a 3 per cent premium to its issue price of Rs 541 per share on the NSE and the BSE.


At 10:05 am; the stock traded 3 per cent higher at Rs 556. So far in the day, it hit a high of Rs 566.95 on the BSE and Rs 569.95 on the NSE in intra-day trade so far. A combined 3.4 million shares changed hands at the counter on the NSE and BSE.


The Rs 635-crore IPO of the real estate firm had received a muted response with issue subscribed 2.01 times. Qualified institutional buyers (QIBs) portion was subscribed 3.84 times, while of non-institutional investors category received 3.03 times subscription. However, retail investor’s portion was subscribed only 53 per cent or 0.53 times.


The company’s objective of the offer is to repay full/ part of its borrowings availed by the company and its subsidiaries and to fund the acquisition of future real estate projects.


Keystone Realtors is one of the prominent real estate developers in terms of absorption in number of units in the targeted micro . The company has a diversified suite of projects across a wide range of price points having developed 20.2 mn sq ft of high-value and affordable residential buildings, premium gated estates, townships and various other projects.


The company has experience developing lifestyle projects, high-value standalone buildings, gated communities and fully integrated townships, re-developments and stalled projects. It has a diversified portfolio of products across a wide range of price points and its presence in several micro . As of June 30, 2022, KRL had 32 completed projects, 12 ongoing projects and 21 forthcoming projects across Mumbai Metropolitan Region (MMR).


Keystone Realtors is available at ~45x FY22 P/E. Given the historical track record of execution, strong brand name and decent historical market share within some of the key micro in MMR, analysts at ICICI Securities remain positive on long term prospects ahead.


Keystone Realtors, under its brand name Rustomjee is a strong player; the company will benefit from the opportunities available supported by its joint partners. With changing lifestyles and increasing importance to the quality of living, the real estate sector is witnessing a strong demand for residential projects, especially in metropolitan areas, which will be a massive opportunity for the organized and branded players, one of which is Rustomjee we believe, analysts at KRChoksey Shares and Securities said in IPO note. With a strong brand and upcoming construction opportunities, the brokerage firm believed the IPO was well placed.


According to Anand Rathi Share and Stock Brokers, Keystone Realtors is a well-established customer-centric brand in MMR with an asset-light and scalable model resulting in profitability and stable financial performance and among the leading residential real estate development companies in MMR with a well-diversified portfolio and robust pipeline coupled with demonstrated project execution capabilities with in-house functional expertise. The brokerage firm believes IPO was reasonably priced as compared to its peers.

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