Keystone Realtors Limited IPO, should you invest?

Keystone Realtors Limited incorporated in 1995, is one of the prominent real estate developers. It has a market share of 28% in Khar, 23% market in Juhu, 11% in Bandra East, 14% in Virar, 3% in Thane, and 5% in Bhandup in terms of absorption (in units) from 2017 to 2021. As part of the business model, the company is entering into joint development agreements, redevelopment agreements with landowners or developers, or societies, and slum rehabilitation projects, which requires lower upfront capital investment compared to the direct acquisition of land parcel. It has a diversified suite of projects across a wide range of price points, and a presence in several micro markets.

Keystone Realtors Limited IPO

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As of June 30, 2022, there were 32 Completed Projects, 12 ongoing Projects, and 21 Forthcoming Projects across the Mumbai Metropolitan Region that includes a comprehensive range of projects under the affordable, mid and mass, aspirational, premium, and super premium categories, all under the Rustomjee brand.

Promoters & Shareholding:

Boman Rustom Irani, Percy Sorabji Chowdhry, and Chandresh Dinesh Mehta are the company promoters.

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Public Issue Details:

Offer for sale: OFS of approx. 1,386,322 equity shares at Rs. 10, aggregating up to Rs. 75 Cr and fresh of approx. 10,351,201 equity shares at Rs. 10, aggregating up to Rs. 560 Cr.

Total IPO Size: Rs. 635 Cr.

Price band: Rs. 514 – Rs. 541.

Objective: For repayment/ prepayment of certain borrowings and funding acquisition.

Bid qty: minimum of 27 shares (1 lot) for Rs. 14,607 and maximum of 13 lots.

Offer period: 14th Nov 2022 – 16th Nov 2022.

Date of listing: 24th Nov 2022.


  • Well-established customer-centric brand in the Mumbai Metropolitan Region.
  • Asset-light and scalable model resulting in profitability and stable financial performance.
  • Demonstrated project execution capabilities with in-house functional expertise.
  • Strong focus on sustainable development.
  • Professional and experienced management team.


  • Dependent on real estate, particularly in the Mumbai Metropolitan region.
  • The business is capital-intensive.
  • Shortage of land for development in the MMR or a significant increase in the cost of such land or transferable development rights available for development in the MMR may adversely impact its business prospects and financial performance.

Subscribe or avoid?

Sectorial outlook – In India, the real estate industry is one of the highest employment generators after the agriculture sector. This can be attributed to the escalating demand for residential properties due to rapid urbanization and inflating disposable incomes of individuals. Moreover, the increasing need for contemporary office spaces and the emerging trend of urban and semi-urban lodging are acting as other significant growth-inducing factors. Furthermore, the expanding e-commerce sector in the country is catalyzing the demand for warehousing facilities, which is providing a positive thrust to the market. Besides this, with the growing use of telecommunication services and the implementation of 5G and data localization norms, there is a rise in the need for data storage facilities. This, in turn, is positively influencing the demand for resilient data center infrastructure and consequently bolstering market growth. Apart from this, various initiatives undertaken by the Government of India, such as investments in smart city projects and tax exemption for interest on housing loans, are anticipated to create lucrative business opportunities for industry investors in the country.

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The financials (revenue and net profit) are shown in the graph below:

Valuation – For the last 3 years average EPS is Rs. 15.66 and the P/E is around 36x on the upper price band of Rs. 541. The EPS for FY22 is Rs. 14 and the P/E is around 38.6x. If we annualize Q1-FY23 EPS of Rs. 0.49, P/E is around 276x. It has Macrotech Developers (286x), Godrej Properties (91x), Oberoi Realty (25x), and Sunteck Realty (163x) as its listed peers as per the RHP. The company’s P/E is between 36x and 276x. The margins and revenues have been inconsistent.

Recommendation – The Company is one of the prominent players in the real estate sector in India and presents across the Mumbai Metropolitan Region with comprehensive, affordable projects and premium & super-premium categories going forward the realty industry is expected to see a healthy uptick in redevelopment projects Thus, Keystone, under its brand name Rustomjee, a strong player will benefit from the opportunities. After considering all the factors the listing still seems expensive based on the current valuation hence we would recommend investors with a high-risk appetite and cash surplus to “Subscribe” to this IPO from a medium to long-term perspective.


This article should not be construed as investment advice, please consult your Investment Adviser before making any investment decision.

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