Macrotech Developers IPO, retail portion subscribed mere 24%, employees quota by paltry 8% on day 2

New Delhi: The IPO of Mumbai-based Macrotech Developers has witnessed a subscription of 33 percent, with investors bidding for 1.18 crore equity shares in comparison to IPO size of 3.64 crore equity shares by noon on 8 April. April 8 is the second day of bidding. The quota reserved for retail investors has been subscribed by mere 24 percent and that of employees by a paltry 8 percent. The company has reserved Rs 30 crore worth of shares for its employees. 

Retail investors have shown muted response to the IPO, an indication of they being risk averse as there has been sufficient volatility since February 2021 in the stock markets and also the evolving corona pandemic situation which shaved off significant revenues of Macrotech Developers last year, said some securities experts.

The Qualified institutional buyers have so far bid for as much as 65 percent of reserved quota for them and the non-institutional investors have bid for mere 12 percent.

According to an IPO note by Angel Broking, there are some risks associated with investment in the company. These are:

1 Company (Macrotech) product portfolio is too concentrated on the residential market of MMR region any change in rule and regulation by authority may affect the company significantly. 

2 Company (Macrotech) not able to generate significant positive cash flow for the shareholder in the last 3 years and may continue to have negative cash flows in the near future.

However, there are some strengths of the company, according to Angel Broking. These are:

1 Change in customer preference of buying ready to move inventory will help the company to increase its market share in MMR region as the company has significant inventory of completed units. 

2 There has been good housing demand after the sector was hit by the covid pandemic and the sales momentum to continue for Macrotech in near future.