Ahead of IPO, Signature Global mobilises Rs 318 crore from anchor investors
Signature Global, a prominent real estate developer in India, made a significant move by raising Rs 318.5 crore through an anchor book on September 18th, just a day before the official opening of its public issue. This anchor book process is a crucial step in the company’s journey to going public.
It involves selling shares to institutional investors before the IPO to gauge interest and secure commitments. In this case, Signature Global allocated 82,72,700 equity shares to anchor investors at a price of Rs 385 per share, which reflects the valuation and market demand for the company’s stock.
What’s particularly noteworthy is the diverse group of 19 investors that participated in Signature Global’s anchor book. Among them were global financial giants like Nomura Trust, Eastspring Investments, Lion Global Investment Funds, Troo Capital, and others. Their participation signifies not only confidence in Signature Global’s business but also the broader appeal of the Indian real estate market to international investors.
For instance, Nomura Trust and Eastspring Investments, both global asset management companies, demonstrated their belief in the Indian real estate sector. The presence of investors like Morgan Stanley, Goldman Sachs, and BNP Paribas Arbitrage – ODI further underlines the interest of prominent financial institutions in Signature Global’s offering. Moreover, investors like Segantii India Mauritius and Copthall Mauritius Investments represent international capital flowing into India, which is indicative of the market’s attractiveness on a global scale.
In essence, Signature Global’s successful anchor book offering with participation from such a diverse and influential group of global investors speaks to the company’s growth potential and the attractiveness of the Indian real estate market to international players. This infusion of capital is likely to support Signature Global’s expansion and development projects within the real estate sector, marking an important milestone in its journey towards becoming a publicly traded company.
The inclusion of domestic investors such as Kotak Mahindra Trustee, Quant Mutual Fund, Nippon India, Bandhan Mutual Fund, and Max Life Insurance Company in Signature Global’s anchor book underscores a diverse and broad-based interest in the company’s impending initial public offering (IPO). This participation represents a combination of institutional and retail investor confidence in the Indian real estate market and, more specifically, in Signature Global’s prospects.
Kotak Mahindra Trustee’s involvement signifies strong domestic institutional support for the IPO, emphasizing the trust placed in the company by significant financial entities. Quant Mutual Fund’s participation highlights the interest of retail investors and mutual fund schemes, a key segment in the Indian investment landscape.
The presence of Nippon India further reinforces the involvement of mutual fund entities, which play a vital role in channeling retail investor funds into the stock market. This mixed participation from institutional and retail investors within India speaks to the appeal of Signature Global’s offering within the local investment community.
Signature Global noted that out of the total allocation of 82,72,700 shares in the anchor book, a significant portion, amounting to 24,67,530 shares, was allocated to three domestic mutual funds through a total of five schemes. This allocation strategy further underscores the company’s commitment to engaging with both institutional and retail investors as it moves closer to becoming a publicly traded entity, marking an important milestone in its journey within the real estate sector.
Signature Global’s maiden public issue, valued at Rs 730 crore, is scheduled to open for subscription on September 20, with the bidding period concluding on September 22. The company has set a price band of Rs 366 to Rs 385 per share for the IPO, providing potential investors with a range within which they can bid for the company’s shares.
This IPO consists of two components: a fresh issuance of shares by Signature Global, totaling Rs 603 crore, which represents the funds that the company aims to raise to support its expansion and growth initiatives in the real estate sector. Additionally, there is an offer-for-sale (OFS) of shares worth Rs 127 crore by the International Finance Corporation (IFC), indicating that a portion of the shares being offered will allow existing stakeholders, in this case, IFC, to divest their holdings.
Signature Global’s decision to go public reflects its strategy to tap into the capital markets to fund its business activities and capitalize on opportunities in the real estate market. Investors will have the opportunity to subscribe to the IPO and become part of the company’s journey as it seeks to establish itself as a prominent player in the real estate industry. The pricing range, subscription period, and composition of the IPO provide potential investors with essential details to assess and participate in this significant financial event.
Signature Global’s utilization of the net proceeds from the fresh issue of shares in its upcoming IPO is outlined with a clear allocation strategy. The company intends to prioritize certain financial objectives with the funds it raises.
Firstly, the significant portion of the net fresh issue proceeds, amounting to Rs 432 crore, will be allocated towards debt repayment. This strategic move will help the company reduce its outstanding debt burden, which stood at Rs 495.26 crore as of June 2023. By deleveraging its balance sheet, Signature Global aims to strengthen its financial position and reduce interest costs, potentially improving its overall profitability.
Additionally, the company plans to allocate the remaining funds from the fresh issue towards inorganic growth opportunities, primarily through land acquisitions. This indicates the company’s intent to expand its real estate portfolio and potentially enter new markets or develop additional projects. Land acquisition is a vital component in the real estate industry, as it provides the foundation for future development.
Lastly, a portion of the funds will be earmarked for general corporate purposes. These funds can be used for various operational needs, which may include working capital requirements, operational improvements, or other initiatives aimed at enhancing the company’s overall competitiveness and efficiency.
The decision to allocate funds in this manner reflects Signature Global’s strategic approach to utilize the IPO proceeds to reduce debt, secure growth opportunities, and support its core business operations. This financial strategy aligns with the company’s objective of becoming one of the top players in the Indian real estate sector.
