Kalpataru to Raise Rs 1,590 Crore through IPO for Debt Repayment and Strategic Expansion
Mumbai-based real estate developer Kalpataru is set to raise ₹1,590 crore via an IPO to repay debt and dilute promoter stake to 81.3%. The company has shown improved financials and reduced unsold inventory.
Kalpataru IpoReal Estate InvestmentMumbai Real Estate DeveloperProperty Market TrendsShare IssueReal Estate MumbaiJun 24, 2025
The decision to go public comes at a time when Kalpataru has demonstrated significant improvements in its financial health. The company has seen a reduction in unsold inventory and a decrease in inventory overhang days, indicating a more efficient and streamlined business model. As of December 2024, the percentage of ready-to-move unsold inventory of homes had fallen to 2.5% from 4.8% in FY22. Additionally, the inventory overhang days reduced to 17 months in 2024 from 26 months in 2022.
Kalpataru has been proactive in managing its intellectual property, having secured a license to use the 'Kalpataru' brand name from Kalpataru Business Solutions, a promoter group company. This license agreement involves an annual payment of ₹25 lakh for the first five years, starting from April 1, 2022. After this period, the company will pay either ₹25 lakh or 0.25% of its annual consolidated turnover, whichever is higher. Based on the annualised FY25 revenue, this amount is estimated to be ₹5 crore and is expected to increase as revenue grows.
Revenue for Kalpataru has grown at a robust annual rate of 39% to ₹1,930 crore between FY22 and FY24. Despite this growth, the company has faced challenges, particularly with higher costs affecting its bottom line. For the nine-month period ending December 2024, Kalpataru reported a net profit of ₹5.5 crore, marking a significant improvement from the net loss of ₹116.5 crore in FY22.
Adjusted EBITDA margin has also shown a positive trend, increasing to 31.8% in the nine months to December 2024 from 18.1% in FY22. However, net debt has risen to ₹10,120.52 crore from ₹9,984.35 crore. The company plans to use ₹1,192.5 crore of the IPO proceeds to repay a portion of this debt.
While the price-earnings multiple may not provide a clear picture due to the company's lack of consistent profitability over a full fiscal year, the price-to-sales multiple stands at 3.9, which is competitive when compared to the industry range of 3-20.
Investors with a high-risk appetite may find the IPO attractive, given the company's strong fundamentals and strategic plans. Kalpataru's commitment to reducing debt and improving operational efficiency positions it well for future growth in the competitive real estate market.
For more detailed financial metrics and insights, investors should review the company's prospectus and consult with financial advisors. The IPO is expected to open soon, and interested parties should stay tuned for the official announcement and subscription details.
Frequently Asked Questions
What is the primary purpose of Kalpataru's IPO?
The primary purpose of Kalpataru's IPO is to raise ₹1,590 crore to repay debt and dilute the promoter's stake to 81.3%.
How has Kalpataru's financial performance improved?
Kalpataru has seen a reduction in unsold inventory, a decrease in inventory overhang days, and a significant improvement in revenue and EBITDA margins.
What are the terms of the brand license agreement with Kalpataru Business Solutions?
Kalpataru has secured a license to use the 'Kalpataru' brand name from Kalpataru Business Solutions, paying ₹25 lakh annually for the first five years, and either ₹25 lakh or 0.25% of annual consolidated turnover thereafter.
What is the current net profit and revenue of Kalpataru for the nine months ending December 2024?
For the nine months ending December 2024, Kalpataru reported a net profit of ₹5.5 crore and revenue of ₹1,624.7 crore.
What is the price-to-sales multiple of Kalpataru compared to its peers?
The price-to-sales multiple of Kalpataru is 3.9, which is competitive when compared to the industry range of 3-20.
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