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Signature Global's IPO oversubscribed 12.5 times despite challenging market conditions

EditorHari G
Published 09/26/2023, 10:07 AM
Updated 09/26/2023, 10:07 AM
© Reuters.

In the face of a loss-making history and intense competition, real estate developer Signature Global's initial public offering (IPO) was oversubscribed 12.5 times, reported Shivani Nyati on Tuesday. The firm successfully raised Rs 730 crore ($9.7 million), a figure that includes a fresh issue of Rs 603 crore ($8 million) and an offer-for-sale by the International Finance Corporation amounting to Rs 127 crore ($1.7 million).

The grey market premium (GMP) of Rs 43 ($0.57) suggests a potential listing price of Rs 428 ($5.7). This successful subscription indicates strong investor confidence in the company's future plans, despite its previous financial struggles.

The proceeds from the IPO will be strategically allocated to various areas of the company's operations. A significant portion will be directed towards debt repayment, a move that could improve the company's financial health and potentially increase its attractiveness to investors.

Additionally, funds will be infused into Signature Global's subsidiaries, Signatureglobal Homes and Signatureglobal Developers. This investment is expected to bolster the performance and growth of these entities, thereby strengthening Signature Global's overall portfolio.

Finally, part of the funds will also be used for inorganic growth through land acquisitions. This strategy could enable Signature Global to expand its operations and market presence, potentially leading to increased revenue generation in the long term.

Signature Global's successful IPO and subsequent plans for fund allocation underscore its strategic approach to overcoming past financial challenges and shaping a more profitable future amidst stiff market competition.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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