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  • Writer's pictureJatin Agarwal

Signature Global IPO


Signatuer Global Logo

Company and IPO Overview:


Signature Global is the largest real estate developer in the National Capital Region of Delhi (Delhi NCR) focused on affordable and mid-segment housing (in the below INR 80 lakh price category) between 2019 and 2021 with a market share of 19%. Signature Global commenced operations in 2014 through a subsidiary, Signature Builders Private Limited, with the launch of the Solera project on 6.13 acres of land in Gurugram, Haryana.


Most of its completed projects, ongoing projects and forthcoming projects are located in Gurugram and Sohna in Haryana, with 84.58% of its saleable area located in this region, and almost all of its projects have been, or are being, undertaken under the AHP or the Deen Dayal Jan Awas Yojna – Affordable Plotted Housing Policy (DDJAY – APHP). In terms of sales in Gurugram, it had a market share of 40% in the affordable and mid segments, and a market share of 29% in all budget categories, in the period from 2019 to 2021.


Signature Global provides “value homes” with attractive designs and amenities. Its projects under the AHP, typically priced below Rs3.00 million per unit, includes amenities such as recreational areas, gardens, open spaces and community halls. As of March 31, 2022, it had completed an aggregate Developable Area of 4.08 million square feet in its Completed Projects and an additional 0.55 million square feet in its Ongoing Projects, comprising 6,282 residential units and 566 commercial units, for which it has received occupation certificates.


Signature Global IPO is the next main board IPO which is ready to go public, the company is about to raise around ₹ 730 crores via IPO comprising Fresh Issue of ₹ 603 crores and Offer For Sale upto ₹ 127 crores. The price band of the issue is ₹ 366 to ₹ 385 with a minimum market lot of 38 shares. Signature global India IPO subscription quota for retail is 10.00%, NII is 15.00% and QIB is 75.00%.


Financials (rounded off):

Date

Total Revenue (₹ in cr)

​​​PAT (₹ in cr)

​31/03/2021

155

(86)

31/03/2022

940

(115)

31/03/2023

1586

(64)


Objectives of the Issue:

1. Re-payment or pre-payment, in full or in part, of certain borrowings availed by the Company.

2. Infusion of funds in certain of our Subsidiaries, namely Signature Global Homes, Signature Infrabuild, Signature Global Developers, and Sternal Buildcon for re-payment or pre-payment, in full or in part, of certain borrowings availed by the Subsidiaries;

3. Inorganic growth through land acquisition.


IPO Details:

IPO Date

20/09/2023-22/09/2023

Face Value

₹1 per share

IPO Price Band

₹366-₹385 per share

IPO Lot Size

38 Shares

Listing at

NSE, BSE

Basis of Allotment

27/09/2023

Credit of Shares in Demat

03/10/2023

Listing Date

04/10/2023

Pre-Issue Shareholding

78.36%

Post-Issue Shareholding

69.63%

Retail Minimum Lot Size

38 shares (₹14,630)


Important things to note about the Company:


Top reasons to consider the IPO:


1. Signature Global is recognized as the premier developer of affordable and mid-range real estate in Delhi NCR, with a wealth of experience in managing projects in these categories.


2. Signature Global is a well known brand and has an extensive distribution network, and powerful digital marketing skills, all of which contribute to swift sales. Indeed, a significant portion of the company’s sales in the Gurugram and Sohna area, as well as under the AHP, are made directly.


3. Signature Global possesses a well-established brand, robust distribution network, and digital marketing prowess, leading to accelerated sales. A notable 45.85% of sales in Gurugram and Sohna and 55.69% under the AHP are direct.


4. Signature Global is an active member of the IGBC and is committed to environmental sustainability, implementing green building concepts in projects to reduce carbon impact and increase green cover.


5. Signature Global has implemented uniform business procedures that allow it to provide top-notch housing solutions to its clients. In the majority of its projects, it utilizes aluminum form-work technology, which not only accelerates the construction process but also guarantees the production of robust and superior quality structures.


Risk Factors to watch out in the IPO:


1. Signature Global’s business and profitability are significantly dependent on the performance of the real estate market in the Delhi NCR region, particularly in Gurugram and Sohna micro-markets in Haryana. The majority of its revenue is generated from these locations, and fluctuations in market conditions may affect its ability to sell projects at expected prices, adversely affecting revenues and earnings.


2. Signature Global’s business and financial performance is dependent on policies such as the Affordable Housing Policy. Any withdrawal of such policies by the Haryana government could certainly affect the company’s revenue and operations.


3. Signature Global is engaged in the development of residential real estate projects for customers in the affordable and mid housing segment, predominantly in Gurugram and Sohna micro-markets. Its success is dependent on its ability to anticipate and respond to consumer requirements.


4. An increase in land prices or shortages of land available for development could have a material adverse effect on the company’s operations. The availability of developable land, particularly in Delhi NCR and Haryana, is limited, making the acquisition of new land highly competitive and costly.


5. As of now, 16.85% of its commercial completed project units remain unsold. The risk of owning unsold inventories can be substantial, and their market value can fluctuate significantly due to changing economic and market conditions. If Signature Global is unable to sell its current unsold inventory, its financial condition may be adversely affected.



Crisp Insights:

  • Signature Global IPO GMP Today: Rs.40/-

  • Signature Global IPO Review: Signature Global has a huge market share in affordable housing in Delhi NCR, the company has demonstrated its ability to scale up rapidly. However, it has incurred losses making the IPO exorbitantly priced with a negative P/E. Based on its performance and GMP one can say it is a Risky Bet.


Disclaimer: All information is provided for educational and informational purpose only. Data is fetched from publicly available sources such as the DRHP filed by the company. The website or the author takes no guarantee for the accuracy of the data however, we have tried our best to present accurate data to out readers. Please consult a financial advisor or do your own analysis before investing/trading in the stock market.

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