Unrated Ipo Note

Antony waste handling cell limited

Wealth Management

MACROTECH DEVELOPERS LIMITED UNRATED IPO NOTE

06-April-21 Issue Key Highlights: Price*: Rs.483 - Rs.486 Issue Opens: 07-April-2021 Issue Size: Rs 2500 Cr. Issue Close: 09-April-2021 *Anchor Investor Bidding date shall be 6-April-21 No of Sh. at No of Sh. Higher Business Overview: Macrotech Developers Limited (“Macrotech Developers”) was Lower band higher price at lower band Particulars % age Amount incorporated as ‘Lodha Developers Private Limited’ on September 25, 1995. Macrotech band price Amount (Rs. Cr) Developers is the largest real estate developer in India, by residential Sales value for (Cr) band(Cr) (Rs. Cr) the financial years 2014 to 2020. The Lodha group has been involved in the real estate QIB* 2.541 2.557 50% 1235.0 1235.0 business since 1986. Further, the company is led by Abhishek M. Lodha, the Managing Non-Inst. 0.762 0.767 15% 370.5 370.5 Director and Chief Executive Officer. They have a leadership team of experienced Retail 1.779 1.790 35% 864.5 864.5 professionals, with relevant functional expertise across different industries, who are Employee 0.062 0.062 30.0 30.0 instrumental in implementing their business strategies. They commenced their Total Issue 5.144 5.176 100% 2500.0 2500.0 operations in Mumbai, developing affordable housing projects in the suburbs of Mumbai, and later diversified into other segments and regions in the MMR and Pune. Issue Details: Their core business is residential real estate developments with a focus on affordable Industry Real Estate and mid-income housing. Currently, they have residential projects in the Mumbai Promoters: Metropolitan Region (“MMR”) and Pune. In 2019, they forayed into the development of logistics and industrial parks and entered into a joint venture with ESR Mumbai 3 Pte. Abhishek Mangal Prabhat Lodha, Rajendra Narpatmal Lodha, Ltd (“ESR”), a subsidiary of ESR Cayman Ltd., an Asia Pacific focused logistics real Sambhavnath Infrabuild and Sambhavnath Trust estate platform. The company has a strong presence in the Extended Western Suburb Capital Structure: micro-market of the MMR, with the 2nd largest share of absorption (by value) and the Fresh Issue (@Higher Band) Rs. 2500 Cr 5th largest share of supply (of units) of residential developments, among the 5 largest Offer for Sale (@Higher Band) N/A developers in the respective micro market, from 2015 to 2020. Company’s brands Total Issue as % of total capital (Post- 11.50% include “Lodha”, “CASA by Lodha” and “Crown – Lodha Quality Homes” for their Issue) (@Higher Band) affordable and mid-income housing projects, the “Lodha” and “Lodha Luxury” brands Post Issue Equity Capital (Rs. Cr.) 447.3 for their premium and luxury housing projects, and the “iThink”, “Lodha Excelus” and “Lodha Supremus” brands for their office spaces. Their in-house sales team is Post Issue Market Cap @ Higher Band 21,740 supported by a distribution network of multiple channels across India as well as key (Rs. Cr.) nonresident Indian (“NRI”) markets, such as the Gulf Cooperation Council, United Face Value Rs.10 Kingdom, Singapore and the United States. Their large on-going portfolio of affordable Issue Route Book Build Issue and mid-income housing projects includes Palava (Navi Mumbai), Upper Thane (Thane Bid Lot (Shares) 30 outskirts), Amara (Thane), Lodha Sterling (Thane), Lodha Luxuria (Thane), Crown Lead Managers Axis Capital, J.P.Morgan India, Kotak Mahindra Thane (Thane), Bel Air (Jogeshwari), Lodha Belmondo (Pune), Lodha Splendora Capital, ICICI Securities, Edelweiss Financial, (Thane) and Casa Maxima (Mira Road). Their large townships are located at Palava IIFL Securities, JM Financial, Yes Securities, and Upper Thane. As part of their logistics and industrial park portfolio, they have SBI Capital Markets, BOB Capital Markets planned to develop a logistics and industrial park of over 800 acres of land near Registered Maharashtra, India Palava. The company has invested in 2 real estate projects in London, namely Lincoln Square in the West End and No. 1 Grosvenor Square in Mayfair. Both these projects Office Registrar Link Intime India Private Limited are now complete, and the net proceeds after repaying the indebtedness are intended to be repatriated to the company. Listing BSE and NSE

Key Investment Details for Retail Investors: (UPI Mandatory) Outlook: Macrotech Developers is one of the largest residential real estate developers Min No. of Shares application 30 in India worldwide they are having a business in UK, US and Singapore. Due to the Amount on the Min. Application (Rs.) 14,580 outbreak of Covid-19 the company suffered some losses in this financial year. Based on 9MFY21 EPS, the company is trading at a negative P/E. The outlook seems Object of the Issue: Offer for Sale negative, owing to the challenges before the real estate industry, and resumption to normalcy may take longer. We do not assign any rating to the IPO Issue. Particulars Amount (Rs Cr)

Reduction of outstanding borrowings 1500.00 Brief Financials Detail: 375.00 Acquisition of land/land dev rights General Corporate Purposes [.] Total [.] Year 9MFY21 FY20 FY19 FY18

Revenue (Rs. Cr.) 2915.01 12442.59 11906.97 13527.19 An Indicative timetable post issue closing:

Particulars On or about EBITDA (Cr.) 765.02 2925.42 3683.99 4038.75

Finalization of Basis of Allotment 16-04-21 PAT (Rs.Cr) (264.30) 744.83 1643.97 1789.39 Refunds/un-blocking of ASBA Accounts 19-04-21 Credit of Equity Shares to DP Ac 20-04-21 EBITDA (%) 26.2% 18.6 % 29.9% 28.0% Trading Commences 22-04-21

PAT (%) (9.10) % 6.0 % 13.8% 13.2%

Shareholding % EPS (Rs.) -5.90 Pre-Issue Post Issue Promoter and Promoter group 100.00% 88.50% Networth (Rs Cr) 6,786.9

Public - 11.50% Book Value (Rs) 151.62 Total 100.0% 100.00%

P/E*(x) N/A

P/BV* (x) 3.18 Source:- RHP,*At Higher Band,P/E is annualized 1

Antony waste Macrotech handling Developerscell limited Limited

Key Strengths

India’s largest residential real estate developer with a leadership position in the attractive MMR market

The MMR is considered the most attractive real estate market in the Top 7 Indian Markets, having the largest share of supply and absorption, as well as the highest average base selling price, of residential units from 2016 to 2020, catering to a wide spectrum of income and demography. The MMR has significant depth of demand for real estate developments across price points. The MMR real estate market has high barriers to entry due to limited land availability, high prices of land and knowledge of the regulatory and approval processes required for developing a project. The company has attained a leadership position in the South Central Mumbai, Thane and the Extended Eastern Suburbs micro-markets of the MMR, with the largest share of supply (by units), absorption (by value) and completion (by area) of residential developments, among the 5 largest developers in the respective micro-market, from 2015 to 2020. In addition, they have a strong presence in the Extended Western Suburb micro-market of the MMR, with the 2 nd largest share of absorption (by value) and the 5 th largest share of supply (of units) of residential developments, among the 5 largest developers in the respective micro-market, from 2015 to 2020.

Well-established brand with ability to sell at premium pricing and throughout the construction phase

The strong and recognizable brand is a key attribute in this industry, since it increases customer confidence, influences buying decision and helps target premium pricing for products. The company typically aims to sell over 80% of the Saleable Area of a project during the construction phase. They leverage their brand value and focus on selling sizeable percentage of units within 1 year from the launch of a project as well as prior to the receipt of the occupation certificate (“OC”), which assists them in generating operating cash flows during the construction phase. The company launched their project Lodha Sterling at a premium in the range of approximately 5% to 8% over the micro-market average price psf and Lodha Trinity at a premium of approximately 20% over the micro-market average price psf.

Proven end-to-end execution capabilities with continuous innovation and ability to deliver projects at competitive cost

The company has adopted an integrated real estate development model, with capabilities and in-house resources to carry on a project from its initiation to completion. Company’s institutionalized understanding of real estate markets positions them well to quickly identify land parcels and contract with landowners at competitive terms. Their design team innovates and designs products with a focus on integrated developments across several price points, in line with the consumer demand. They also work closely with external consultants to drive improvements in the design of their products. In 2019, they launched ‘Crown’ as a new brand of affordable homes, priced between ₹ 25 lakh and ₹ 50 lakh. In addition, they have recently started developing plotted developments (plots and villas) as a separate project named ‘Lodha Villa Royale’, which is located in proximity to Viviana Mall, Thane.

Strong focus on sustainable development

The company follows a comprehensive approach to sustainable development from an early design phase through the construction period. The design of most of their residential developments includes passive features such as ventilation to ensure low energy usage. They have implemented environmentally friendly building concepts in many of their projects and aim to increase green cover in their developments to minimize the net carbon impact. The company has obtained leadership in energy and environment design (“LEED”) certifications as well as 5-stars from the Bureau of Energy Efficiency for various developments. They are a member of the U.S. Green Building Council. They are working with global service providers such as Suez Water Technologies and Solutions (formerly known as GE Water and Process Technologies), Schneider and a global solar energy solutions provider, to develop Palava as a model of sustainable urbanization.

Highly diversified portfolio across price points and micro-markets in the MMR with a focus on affordable and mid-income housing

The company has a diversified portfolio of residential developments, spread across price points and micro-markets in the MMR, catering to a wide spectrum of economic and demographic segments, from luxury residences in South Mumbai to large, integrated townships in the extended suburbs offering affordable homes. Over the years, they have established a strong reputation and track record in affordable and mid-income as well as premium housing projects. Company’s ability to design a high-quality and differentiated product and positioning it to the target segment through appropriate marketing and branding strategy, has enabled them to deliver several prominent projects in this category.

High quality management team

The company is organized as a matrix organization, with their businesses organized by business units headed by CEOs and functions serving the regions in their respective areas of expertise. The Managing Director and Chief Executive Officer, Abhishek M. Lodha, has in-depth industry knowledge and extensive managerial experience in the real estate development business. They also have a leadership team of experienced professionals, having relevant functional expertise across different industries.

Key Risk:

The Company has a substantial amount of debt, which could affect its ability to obtain future financing or pursue our growth strategy, they reported a restated loss for the nine months ended December 31, 2020 and may incur additional losses in the future. Company had negative cash flows in the past and may continue to have negative cash flows in the future. Unsold inventory in projects if not sold in a timely manner adversely affects the business, results of operations and financial condition.

Antony waste Macrotech handling Developers cell limited Limited

Management Personnel

Name & Designation Brief profile

Mukund Manohar Chitale is the Independent Director and Chairman of the company. He has nearly 43 years of Mukund Manohar Chitale experience as a practicing Chartered Accountant. He was appointed as an Independent Director of our Company with effect from November 23, 2016. He has nearly 43 years of experience as a practicing Chartered Independent Director and Chairman Accountant. He is a fellow member of ICAI and has served as the President of ICAI in the year 1997-1998. He was also the Chairman of the Ethics Committee of BSE.

Abhishek Mangal Prabhat Lodha is the Managing Director and Chief Executive Officer of the company. He has Abhishek Mangal Prabhat Lodha 19 years of experience in strategy, design, project management, construction, corporate planning, legal and Managing Director and Chief brand communication. Prior to joining the Company, he was working as a business analyst with McKinsey & Executive Officer Company, Atlanta, United States. He was awarded the NDTV Property Award 2017 in the category of “Emerging Star of the Real Estate”.

Rajendra Narpatmal Lodha is the Whole-Time Director of the company. He started his career with Lodha group. Rajendra Narpatmal Lodha He has 31 years of experience in all facets of real estate development. He ceased to be the Director of our Company from March 9, 2016 and was re-appointed as the Whole-Time Director of our Company with effect Whole-Time Director from June 21, 2016, and subsequently with effect from March 1, 2018. . He started his career with Lodha group. He has 31 years of experience in all facets of real estate development.

Brief Financial Details:

Particulars (INR Cr) 9MFY21 FY20 FY19 FY18 Equity Share Capital 395.8 395.8 395.8 395.8 Reserves 3445.3 3715.7 2994.5 1369.6 Net Worth 3841.1 4111.5 3390.3 1765.4 Revenue from Operations 2915.0 12442.6 11907.0 13527.2 Revenue Growth (%) (68.56) % 4.50% (11.98) % EBITDA as stated 767.5 2925.4 3684.0 4038.8 EBITDA Margin (%) 26.3% 30.5% 30.9% 29.9% Profit Before Tax (521.3) 1006.3 2488.9 2709.5 Net Profit for the Period (264.3) 744.8 1644.0 1789.4 PAT as % to revenue (9.1) % 5.9 % 13.8% 13.2% EPS (6.8) 18.5 41.3 45.1 RONW (%) (7.0) % 17.8 % 48.3% 101.1% Net Asset Value (₹) 97.0 103.9 85.6 44.6

Source: Company RHP, Systematix shares and Stocks (India) Limited.

Peer Comparison

Total Revenue Name of the Company Face Value EPS (Basic) NAV P/E RoNW (%) (in Cr) Macrotech Developers Ltd 12,560.98 10 18.46 103.86 N/A 17.8% Peer Group Brigade Enterprises Ltd 2,681.56 10 6.39 119.73 43.62 4.66% DLF Ltd 6,888.14 2 (2.41) 139.24 NA (26.62)% Godrej Properties Ltd 2,914.59 5 10.84 190.64 131.10 5.63% Oberoi Realty Ltd 2,285.99 10 18.96 237.33 30.80 7.99% Prestige Estates Projects Ltd 8,243.30 10 10.63 139.41 25.80 9.82% Sobha Ltd 3,825.66 10 29.69 256.33 15.56 11.59% Sunteck Realty Ltd 631.55 1 7.14 199.50 48.10 3.46%

Source: Company RHP, Systematix shares and Stocks (India) Limited.

Antony waste handling cell limited

Collections by key developers across India Supply and absorption trends (in units) in the MMR from 2015 to 2020 600 120000 500 400 100000 300 80000 200 60000 100 0 40000

DLF 20000 OBEROI

GROUP 0

PRESTIGE

GODREJ SODHALTD.

PROPERTIES 2017 2018 2019 2020 LODHA GROUP LODHA

COLLECTIONS(INR bn) Supply (In Cr) Absorption (in Cr)

Sales and deliveries by key developers across India

1000

100

DLF

OBEROI

GODREJ

SODHALTD. PROPERTIES

LODHA GROUP LODHA Sales (Inr Bn) PRESTIGE GROUP PRESTIGE

Export growth index of countries from 2017 to 2019 Macrotech Developers Limited 200 180 160 140 120 100 80 60 40 20

USA

India

China

Japan

Thailand

Indonesia

Singapore

Philippines Hong Kong SAR Kong Hong

2017 2018 2019

AntonyDISCLOSURE/APPENDIX waste handling cell limited

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