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Signature Global (India) Limited IPO Company Profile :

Signature Global (India) Limited is the largest real estate development company in the National Capital  Region of Delhi (Delhi NCR) focussed on affordable and mid-segment housing in terms of units supplied (in the below ₹ 80 lakh price category) between 2019 and 2021 with a market share of 19%. Most of the Completed Projects, Ongoing Projects, and Forthcoming Projects are located in Gurugram and Sohna in Haryana, with 84.58% of the company’s Saleable Area located in this region, and almost all of the projects have been, or are being, undertaken under the Affordable Housing Policy (AHP) or the Affordable Plotted Housing Policy or the Deen Dayal Jan Awas Yojana (DDJAY –APHP). In terms of sales in Gurugram, the company had a market share of 40% in the affordable and mid-segment, and a market share of 29% in all budget categories, in the period from 2019 to 2021. The types of projects they work on are:

  • Residential Projects
  • Commercial Projects

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    Signature Global (India) Limited IPO Financial Analysis:

    Particulars Mar-22 Mar-21 Mar-20 CAGR
    Revenue 901.29 82.05 241.55 55.1%
    COGS 820.09 66.8 187.44  
    Empl. Cost 64.04 43.15 31.76
    Other exp 86.57 52.81 44.68
    EBITDA -69.41 -80.71 -22.33 45.9%
    EBITDA margin% -7.70% -98.37% -9.24%  
    Depreciation 20.72 11.8 4.56
    Interest 69.12 70.88 54.81
    PBT -159.25 -163.39 -81.70 24.9%
    Total tax -20.91 -11.18 -17.47
    PAT -138.34 -152.21 -64.23 29.1%
    Dep./revenue% 2.30% 14.38% 1.89%
    Int./revenue% 7.67% 86.39% 22.69%

    Key operational information relating to the projects, as of March 31, 2022:

    Details Completed Projects Ongoing Projects Forthcoming Projects Total %
    Number of Projects by Geography
    Gurugram 4 17 20 41 69.49
    Sohna 1 7 4 12 20.34
    Karnal 0 3 0 3 5.08
    Manesar 0 0 2 2 3.39
    Ghaziabad 0 0 1 1 1.69
    Total 5 27 27 59 100.00
    Estimated Saleable Area (square feet)
    Owned 2855138 11472121 11241127 25568386 66.11
    Collaboration Agreement 0 4627574 8476649 13104223 33.89
    Total 2855138 16099695 19717776 38672609 100.00
    Estimated Saleable Area by Geography (square feet)
    Gurugram 2087598 10791606 839958 13719162 44.1
    Sohna 767540 4011234 6650781 11429555 36.74
    Karnal 0 1296855 0 1296855 4.168
    Manesar 0 0 3622766 3622766 11.64
    Ghaziabad 0 0 1044272 1044272 3.356
    Total 2855138 16099695 12157777 31112610 100

    Signature Global (India) Limited IPO Strengths:

    • Signature Global (India) Limited offerings have been focussed on the affordable and mid segments in Delhi NCR which have significant demand. In the past five years, absorption has outnumbered supply in the affordable and mid-segment category and inventory has been witnessing a continuous decline, indicating sustainable demand in these categories. In the period from 2017 to 2021, residential units less than ₹ 80 lakhs per unit represented 78% of the aggregate sales among residential real estate projects in India.

    • Signature Global (India) Limited was also the largest real estate developer under the DDJAY –APHP in the Gurugram and Sohna region, with a market share of 49% of the total supply of units under DDJAY –APHP floors in the period from 2019 to 2021, and 40% market share in terms of sales of units between 2019 and 2021 in Gurugram in the affordable and mid-segment category.

    • In order to further strengthen the brand, Signature Global (India) Limited has engaged celebrity brand ambassadors for various campaigns from time to time. In addition, renowned actress and Padma Shri recipient, Vidya Balan, is the company’s brand ambassador and has been associated with the “SignatureGlobal” brand for over five years.

    • Signature Global (India) Limited has demonstrated its ability to scale up rapidly by growing the project portfolio from 9.06 million square feet of Saleable Area as on March 31, 2018, to 38.67 million square feet of Saleable Area as on March 31, 2022, which includes the Saleable Area of the Completed Projects and Ongoing Projects and the estimated Saleable area of the Forthcoming Projects.

     

    Signature Global (India) Limited IPO Risk Factors:

    • Company’s business and profitability are significantly dependent on the performance of the real estate market in the Delhi-NCR region, generally, and particularly in Gurugram and Sohna micro-markets in Haryana. Fluctuations in market conditions may affect the company’s ability to sell its projects at expected prices, which may adversely affect its revenues and earnings.

    • Haryana government is promoting the AHP and DDJAY-APHP policies in order to achieve the ‘PMAY-housing for all by 2022’ goal, any amendments to policies, such as a reduction in the permissible commercial development, or reduction in price ceilings for residential units under the AHP, may impact the profitability and results of operations of the company

    • Signature Global (India) Limited has incurred a net loss in the past, and may not be able to achieve or maintain profitability in the future.

    • The availability of developable land, particularly in Delhi NCR and Haryana, is limited, and therefore, the acquisition of new land in such areas poses substantial challenges, including being highly competitive and costly. Further, due to the increased demand for land in connection with the development of residential, commercial and retail properties, the company has experienced, and may continue to experience increased competition in the attempt to acquire land/ interest in such land in the geographical areas in which the company operates and the areas in which it anticipates operating in the future.

    • Significant increases in prices (including increases in taxes and levies) or shortage of or delay or disruption in the supply of, construction materials, contract labour and equipment could adversely affect the estimated construction cost and timelines resulting in cost overruns.

    Source: Signature Global (India) Limited DRAFT RED HERRING PROSPECTUS (DRHP)

    Signature Global (India) Limited IPO FAQ

    Ans.Signature Global (India) Limited IPO will comprise fresh share issue and new offer share issue. The company aims to go public to accelerate its growth and expansion plan.

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