Kalpataru Real Estate IPO Receives Tepid Response on Day 2 Despite Strong Anchor Support

Retail Bids Trickling In; Institutional Investors Stay on Sidelines

June 25, 2025 – Mumbai-based Kalpataru Limited’s initial public offering (IPO), which opened on June 24 and will close on June 26, is witnessing lukewarm demand on the second day of bidding. Despite strong anchor investor participation, the public issue has seen a muted response in the broader market.

As of 11:03 a.m. on June 25, the ₹1,590 crore IPO had been subscribed only 0.13 times overall. The retail investor category showed relatively higher interest, with a subscription of 0.48 times, while bids from institutional investors were conspicuously absent.

IPO Details and Anchor Investor Backing

The IPO is priced in the range of ₹387 to ₹414 per equity share. Kalpataru had secured ₹708 crore from nine marquee anchor investors at the upper end of the price band before the issue opened. Notable participants in the anchor round included GIC Singapore, Bain Capital’s GSS Opportunities Investment, SBI Mutual Fund, and ICICI Prudential Mutual Fund.

Fund Utilization and Financial Performance

Kalpataru intends to deploy ₹1,192.5 crore from the IPO proceeds toward repaying debt across its operations and subsidiaries. The remainder will be used for general corporate purposes. This aligns with the company’s strategy to reduce its net gearing ratio, which reached 86.5 per cent as of December 2024.

The real estate firm has shown signs of recovery in recent quarters. For the nine months ended December 2024, it reported a net profit of ₹8.7 crore, bouncing back after three consecutive years of losses. Revenue from operations reached ₹1,624.7 crore with an adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin of 31.8 per cent, up from 23.3 per cent in FY24.

Business Footprint and Growth Outlook

Kalpataru has a portfolio of 120 completed projects covering 25.87 million square feet and over 1,886 acres of land reserves. Its operations are concentrated in the Mumbai Metropolitan Region, Pune, and expanding into Hyderabad, Noida, Nagpur, and Indore.

The IPO’s tepid response so far highlights a cautious investor sentiment. While retail interest is modest, broader participation, particularly from institutions, remains critical for the IPO’s success as it enters its final subscription day.

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