Business Profile of the Kalpataru Limited
Kalpataru Limited, founded in 1969, is a leading real estate company in India. Kalpataru is an integrated real estate development company, focusing on land identification, acquisition, planning, design, execution, sales, and marketing. The company is a prominent player in the Mumbai Metropolitan Region (MMR) in Maharashtra. The company is the fifth largest developer in the MCGM area and the fourth largest developer in Thane, Maharashtra.
The company focuses on the development of luxury, premium, and mid-income residential, commercial, and retail projects, integrated townships, lifestyle gated communities, and redevelopments. The company leverages experience and research-based approach for various aspects of project design and development. They have completed prominent projects in various locations in the MMR, including Kalpataru Avana, Kalpataru Pinnacle, Kalpataru Residency, Kalpataru Gardens, Kalpataru Aura, Kalpataru Solitaire, Siddhachal, and Kalpataru Square.
The Main Objectives to Launch the Kalpataru Limited IPO
As per the draft red hearing prospects, the IPO issue consists only of fresh issue by the Company. The company through IPO proceeds plans to repay some of the existing debt of its company and its subsidiary.
| Particulars | Estimated amount |
| Repayment of certain borrowings availed by | 11925 |
| - The Company | 3000 |
| - Subsidiaries | 8925 |
| General corporate purposes | [●] |
| Total | [●] |
IPO Details of Kalpataru Limited:
| IPO Open Date | N.A. |
| IPO Close Date | N.A. |
| Basis of Allotment | N.A. |
| Listing Date | N.A. |
| Face Value | ₹10 per share |
| Price | N.A. |
| Lot Size | N.A. |
| Total Issue Size | [•] Equity Shares |
| Aggregating up to ₹ 15,900 million | |
| Fresh Issue | [•] Equity Shares |
| Aggregating up to ₹ 15,900 million | |
| Offer For Sale | N.A. |
| N.A. | |
| Issue Type | Book Built Issue IPO |
| Listing At | BSE & NSE |
| QIB Shares Offered | Not less than 75% of the Net Issue |
| Retail Shares Offered | Not more than 10% of the Net Issue |
| NII (HNI) Shares Offered | Not more than 15% of the Net Issue |
Kalpataru Limited IPO Issue Price & Size
The issue price of Kalpataru Limited hasn’t been released yet. Upon releasing the dates, the investors can bid between these price ranges. The company only has an OFS of up to [●] equity shares consisting of Rs. 1811.65 crores.
Launch Date of Kalpataru Limited IPO
The IPO of Kalpataru Limited company is launching on (Opening Date XXXX), hence the opening date for bidding is (Open Date) and the IPO is closing on (Closing Date). Investors can bid in this IPO between these days during the primary market hours.
Kalpataru Limited Financial Statements
| Particular | FY24 | FY23 | FY22 |
| Income | |||
| Revenue from operations | 19299.84 | 36331.82 | 10006.73 |
| Other income | 507.68 | 303.78 | 110.55 |
| Interest income | 491.84 | 530.51 | 2368.26 |
| Total income | 20299.36 | 37166.11 | 12485.54 |
| Expenses | |||
| Cost of sales and other operational expenses | 17174.94 | 33968.29 | 8487.94 |
| Employee benefits expense | 1279.51 | 1317.91 | 752.38 |
| Finance costs | 342.39 | 1302.86 | 3064.14 |
| Depreciation and amortisation expense | 326.36 | 318.43 | 326.99 |
| Other expenses | 2129.29 | 1837.67 | 1244.41 |
| Total expenses | 21252.79 | 38745.16 | 13875.86 |
| Profit / (loss) for the year | -1138.06 | -2267.87 | -1215.49 |
| Peers | Sales value | Sales Area | Sales Unit | Gross Collection | Revenue from operation | EBITDA | EBITDA Margin % | Adjusted EBITDA | Adjusted EBITDA Margin % |
| Kalpataru Limited | 32019.83 | 2.83 | 2095 | 26859.24 | 19299.84 | -780.12 | -4.04% | 4487.99 | 23.25% |
| Godrej Properties Limited | 225270 | 20 | 14310 | 114360 | 30356.2 | 11966.6 | 39.42% | 13790 | 45.43% |
| Macrotech Developers Limited | 145200 | 11.1 | N.A. | 112600 | 103161 | 26757 | 25.94% | 34300 | 33.25% |
| Keystone Realtors Limited | 22660 | 1.2 | 1031 | 22033 | 22222.5 | 1629.2 | 7.33% | 4064.7 | 18.29% |
| Mahindra Lifespace Developers Limited | 23280 | 2.47 | N.A. | 13850 | 2121 | 754 | 35.55% | N.A. | N.A. |
| Oberoi Realty Limted | 40070 | 1.07 | 705 | N.A. | 44957.9 | 24098.7 | 53.60% | N.A. | N.A. |
| Prestige Estates Projects Limited | 210400 | 20.25 | 10068 | 119544 | 78771 | 24984 | 31.72% | N.A. | N.A. |
| Sunteck Realty Limited | 19150 | N.A. | N.A. | 12360 | 5648.4 | 1172.9 | 20.77% | N.A. | N.A. |
Kalpataru Limited Promoters & Shareholding
There are two promoter of Kalpataru Limited i.e.
- Mofatraj P. Munot
- Parag M. Munot.
In table below shareholding of promoter along with prompter group has been shown.
| Name | No. of equity shares held | % of the pre-Issue paid up Eq. capital |
| Mofatraj P. Munot | 3,63,09,000 | 26% |
| Parag M. Munot | 1,25,68,500 | 9% |
| Total | 4,88,77,500 | 35% |
| Promoter Group | ||
| Appropriate Developers Pvt Ltd | 13938400 | 9.98% |
| Shouri Investment & Trading Co Pvt Ltd | 13685700 | 9.80% |
| Mrigashish Investment & Trading Co Pvt Ltd | 13685700 | 9.80% |
| Flex-O-Poly Private Limited | 1,36,85,700 | 9.80% |
| Mrigashish Constructions Pvt Ltd | 1,34,06,400 | 9.60% |
| Monica P. Munot | 69,82,500 | 5% |
| Sudha R. Golecha | 52,36,875 | 3.75% |
| Sunita V. Choraria | 52,36,875 | 3.75% |
| Mofatraj P. Munot (as a trustee
for the benefit of Sharadchandrika Munot Family Trust) |
48,87,750 | 3.50% |
| MPM Holding LLP | 13,300 | 0.01% |
| Mofatraj P. Munot (HUF) | 13,300 | 0.01% |
| Total | 90772500 | 65.00% |
Should You Subscribe to Kalpataru Limited IPO or Not
While investing or subscribing to any IPO, consider the investment rationales related to the company. Hence, here you can find out the strength of the company that will be its growth factors. And also check the risk factors that can affect the growth and operational efficiency of the company.
Competitive Strengths of Kalpataru Limited:
Prominent Real Estate Company
A prominent real estate developer in the MMR in Maharashtra, present across all micro-markets, was ranked first among the top seven Indian markets in terms of supply, absorption, and average base selling price from 2019 to 2023.
As of FY24, the developer had completed 68 Projects in the Mumbai Metropolitan Region and Pune. Wheras, the develop has 23 Ongoing Projects, nine Forthcoming Projects, and five Planned Projects, collectively representing 94.93% of the total developable area of their development portfolio.
| Market/Micro-market | Number of Projects | Developable Area (msf) | Forthcoming Projects |
| MMR comprising | 17 | 15.97 | 8 |
| South Central Mumbai | 4 | 0.29 | 1 |
| Western Suburbs | 5 | 2.36 | 3 |
| Eastern Suburbs | 2 | 1.24 | 1 |
| Thane | 3 | 5.89 | 3 |
| Navi Mumbai | 1 | 0.49 | - |
| Extended Western Suburbs | 1 | 3.12 | - |
| Extended Eastern Suburbs | 1 | 2.58 | - |
| 6 | 1 | ||
| Pune | 6 | 4.44 | 1 |
| Others | 2 | 1.62 | 1 |
| Total | 25 | 22.02 | 10 |
Well-established brand
The Kalpataru Group carries its 55-year legacy and focuses on branded realty. The Kalpataru Group leverages its brand value and its position to sell its units throughout the construction phase and selling a significant saleable area within one year from the launch of a project.
The brand is incorporated in most of their project names, including Kalpataru Avana, Kalpataru Magnus, Kalpataru Splendour, and Kalpataru Parkcity.
Strong project pipeline
As of FY24, the company has 25 ongoing projects, 10 forthcoming projects, and five planned projects across various micro-markets within the Mumbai Metropolitan Region (MMR). As of FY24, the company's forthcoming projects comprise approximately 19.93 msf of developable area and are expected to launch across the FY25, 2026, and 2027. The MMR was ranked first among the top seven Indian markets in terms of supply, absorption, and average base selling price from 2019 to 2023.
| Type of project | South Central Mumbai | Western Suburbs | Eastern Suburbs | Thane | Navi Mumbai | Extended Western Suburbs | Extended Eastern Suburbs |
| Ongoing Projects | 4 | 5 | 2 | 3 | 1 | 1 | 1 |
| Forthcoming Projects | 1 | 3 | 1 | 3 | - | - | - |
End-to-end execution capabilities
The company has integrated complete real estate development model, which involves activities from starting till end. The business development team scouts for strategic land and redevelopment opportunities, while the design team innovates and designs projects based on market research. The sales and marketing team understands the real estate market and uses interventions to help customers make informed decisions. The company's end-to-end execution capabilities enable them to develop high-quality projects, benefiting from economies of scale and supply chain efficiency.
Green and sustainable buildings
Kalpataru is a founding member of the Indian Green Building Council (IGBC) and focuses on implementing green and environmental sustainability practices in reality development projects. The company aim to ensure energy efficiency, water conservation, and resident health and uses materials with GreenPro certification. The company also incorporates sustainable practices such as local construction materials, plant planting, rainwater harvesting systems, natural ventilation, and reflective roofing. Their green initiatives lower operating costs and reduce water and energy consumption.
Strong promoter backing
The Kalpataru Group, established in 1969, has a multi-national presence in various sectors including construction, infrastructure, and warehousing. The company benefits from the Kalpataru Group's expertise in construction and infrastructure, and synergies with its offerings in procurement, vendor development, and information technology. The company has a qualified management team with extensive experience in the real estate sector, with an average senior management team of over 20 years.
Risk Factors of Kalpataru Limited:
History of losses
The company's profit/loss for the financial years 2024, 2023, and 2022 was $1,138.06, $2,267.87, and $1,215.49. The company expects expenses to increase over time and may recur losses due to investments expected for business growth. Failure to increase revenue sufficiently could prevent the company from maintaining profitability or generating positive cash flow consistently. If the company cannot generate adequate revenue growth and manage expenses and cash flows, further losses may occur. Addressing these risks and challenges could adversely affect the company's business, cash flows, financial condition, and results of operations, as well as the trading price of its Equity Shares.
Kalpataru group companies have incurred losses in the last three years and it doesn’t seem to be stopping. Sustained losses in the future by group companies could force Promoter Company to provide financial support, which could adversely affect business fundamentals, financials, and cash flows
Projects concentration
As of March 31, 2024, 94% of company’s real estate development projects were located in and around the Mumbai Metropolitan Region (MMR) and Pune. The real estate market in the MMR and Pune may be affected by prevailing local social, political, and economic conditions, limited availability of land, supply and demand for properties comparable to those we develop, lack of financing for real estate projects, construction costs, change in demographic trends, employment and income levels, regional natural disasters, pandemics, performance of key industrial sectors, or the public perception that any of these events may occur.
Gestation period along with scarcity of land
Availability of land in cities Mumbai Metropolitan Region (MMR) and Pune is a very limited and getting hands on that land is highly competitive due to geographical constraints, high population density. The development of the reality projects takes considerable amount of time, a lot of regulatory work and delays and cost overruns may affect the completion of these projects.
Company’s ability to identify, acquire suitable land parcels and completion of projects on time is dependent on various factors, some of which may be beyond their control.
Working capital funded through presales
The company markets and pre-sells projects in phases, from launch to completion, depending on market conditions. Pre-sales allow the company to benefit from installment payments from customers, which can be used as working capital. This helps maintain healthy working capital levels and reduces debt servicing costs. Any decrease or cancellation may increase unsold inventory, increasing working capital requirement of the company.
| Particulars | FY24 | FY23 | FY22 |
| % of total Sales | |||
| Sales collections | 83.88 | 74.64 | 73.75 |
Impacted by Regulatory actions
Company and its sub contractors are subject to labor laws, including minimum wages, working hours, health and safety of laborers, and registration requirements for contract labor. Apart from working conditions and labor laws, reality companies are subject to changes in tax regimes. Increased taxes and new stamp duties could increase costs, impacting acquisition and sale costs. Changes in these taxes or stamp duties could negatively affect the company's profitability and business results.
Any non-compliance with laws or increasing of taxes could lead to regulatory action, penalties, which could adversely affect our operations and financial condition.
Kalpataru Limited Grey Market premium
Grey market premium is the premium quoted over the IPO issue price. GMP shows that investors are ready to pay above the upper band of the IPO issue price. GMP is determined in the grey market as per the demand and supply of the shares in the primary market. A grey market is that unofficial ecosystem of unlisted companies' stocks that start trading even before the launch of the IPO to the date of its listing.
Also Read: What is Grey Market Premium in IPO: How is GMP Calculated & Reliable
However, GMP is not a reliable factor, as it keeps fluctuating as per the demand and supply of shares in the primary market. There are numerous factors that affect the stock market in India and individual stock prices of different companies that are already listed and trading in the secondary market. However, for an IPO-bounded company, you can consider the GMP as the speculative listing price of the share
According to various online sources, the Grey Market Premium or GMP of the Kalpataru Limited is trading around Rs XX in the grey market. It means shares are trading at the upper band issue price of Rs XX with a premium in the grey market and may list around the same price.
