Signatureglobal (India) Limited largest real estate development company in the National Capital Region of Delhi (“DelhiNCR”) in affordable and lower mid-segment housing. It has strategically focused on the Affordable Housing (“AH”) segment (below ₹ 4 million price category) and the Middle Income Housing (“MH”) segment (between ₹ 4 million to ₹2.5 million private-category) through GoI and state government policies.
OBJECTS OF THE ISSUE
- Payment of borrowings.
- Infusion of funds in certain of its Subsidiaries. Inorganic growth through land acquisitions.
Pradeep Kumar Aggarwal
Chairman and Whole time Director of the Company. He has over eight years of experience in real estate industry. He has been appointed as a director on the Board of the Company since November 2, 2017.
Lalit Kumar Aggarwal
Vice Chairman and Whole-time Director of the Company. He has an experience of over seven years in the real estate sector. He has been appointed as a director on the Board of the Company since February 15, 2022.
Ravi Aggarwal
Managing Direct of the Company. He is a fellow member of the Institute of Chartered Accountants of India. He has over nine years of experience in the real estate industry. He has been appointed as a director on the Board of the Company since November 5, 2015.
Meghraj Bothra
Company Secretary and Compliance Officer of the Company. He joined the Company on May 2, 2022.He has been admitted as a fellow at the Institute of Company Secretaries of India since November 13, 2011.
Manish Garg
Chief Financial Officer of the Company. He joined the Company on October 17, 2016. He holds a bachelor’s degree in commerce (honors) from the University of Delhi. He has been admitted as an associate member of the institute of chartered accountants of India.
Rajat Kathuria
Chief Executive Officer of the Company. He joined the Company on February 1, 2020. He holds a bachelor’s degree in commerce from the University of Delhi and has passed the final examination conducted by the institute of chartered accountants of India.
COMPANY PROFILE
- The Company commenced operations in 2014 through its Subsidiary, Signature Builders Private Limited, with the launch of its Solera project on 6.13 acres of land in Gurugram, Haryana.
- As of March 31, 2023, it had sold 27,965 residential and commercial units, all within the Delhi NCR region, with an aggregate Saleable Area of 18.90 million square feet.
- Most of its Completed Projects, Ongoing Projects, and Forthcoming Projects are located in Gurugram and Sohna in Haryana, with 88.49% of its Saleable Area located in this region as of March 31, 2023, and almost all of its projects have been, or are being, undertaken under the AHP or the DDJAY -APHP. It has adopted an integrated real estate development model, with in-house capabilities and resources to execute projects from inception to completion which enables it to offer its projects at competitive prices.
- The Company has an extensive distribution network focused on the customer segments it targets, with 593 channel partners and an in-house team of 41 employees engaged in direct sales and 100 employees for indirect sales, as of March 31, 2023.
COMPETITIVE STRENGTHS
- Largest affordable and lower-mid and mid-segment real estate developer in Delhi NCR.
- Well-established brand, strong distribution network, and digital marketing capabilities translate into faster sales.
- Fast growing with the ability to scale up rapidly.
- Ability to provide aspirational lifestyle and amenities at affordable pricing and strategic locations. Standardized product offerings, quick turnaround, and end-to-end in-house project execution expertise. Positive operating cash flows with low levels of debt.
KEY CONCERNS
- The Company has incurred a net loss and negative Net Worth in the past.
- Its business is significantly dependent on the performance of the real estate market in the Delhi- NCR region.
- Changes in government policies may adversely affect its business.
- Significant increases in prices or shortage of or delay or disruption in the supply of, construction materials, contract labor, and equipment could adversely affect its estimated construction cost. Competition from other renowned brands.
- The Company is required to obtain statutory and regulatory approvals and permits to operate its business. Any delay or failure in that may affect the business.
COMPARISON WITH LISTED INDUSTRYPEERS (AS ON 31ST MARCH 2023)
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FINANCIALS (RESTATED CONSOLIDATED)
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OUTLOOK & VALUATION
Signature Global is the largest real estate player in Delhi, NCR, operating in affordable and lower-mid-segment housing. It is a well-known brand with a strong distribution network. The company also has large projects on hand.
But it has been a loss-making business for the last few years. Secondly, its major business is focused on a limited region. Changing government policies may also impact its business adversely.
As it has been at a loss, we cannot define its P/E valuation; however, its discounted revenue multiple is 3.48x, which is lower than the industry average. However, due to its current financial condition and other risk factors, we will avoid this IPO.
DISCLAIMER:
The information contained herein are strictly confidential and are meant solely for the information of the recipient and shall not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written permission of Swastika Investmart Ltd. (“SIL”). The contents of this document are for information purpose only. This document is not an investment advice and must not alone be taken as the basis for an investment decision. Before taking any decision to invest, the recipient of this document must read carefully the Red Herring Prospectus (“RHP”) issued to know the details of IPO and various risks and uncertainties associated with the investment in the IPO of the Company. All recipients of this document must before acting on the given information/details, make their own investigation and apply independent judgment based on their specific investment objectives and financial position. They can also seek appropriate professional advice from their own legal and tax consultants, advisors, etc. to understand the risks and investment considerations arising from such investment. The investor should possess appropriate resources to analyze such investment and the suitability of such investment to such investor’s particular circumstances before making any decisions on the investment. The Investor shall be solely responsible for any action taken based on this document. SIL shall not be liable for any direct or indirect losses arising from the use of the information contained in this document and accept no responsibility for statements made otherwise issued or any other source of information received by the investor and the investor would be doing so at his/her/its own risk. The information contained in this document should not be construed as forecast or promise or guarantee or assurance of any kind. The investors are not being offered any assurance or guaranteed or fixed returns on their investments. The users of this document must bear in mind that past performances if any, are not indicative of future results. The actual returns on investment may be materially different than the past. Investments in Securities market products and instruments including in the IPO of the Company are highly risky and they are generally not an appropriate avenue for someone with limited resources/ limited investment and low risk tolerance. Such Investments are subject to market risks including, without limitation, price, volatility and liquidity and capital risks. Therefore, the users of this document must carefully consider all the information given in the RHP including the risks factors before making any investment in the Equity Shares of the Company.
Swastika Investmart Ltd or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither Swastika Investmart Ltd nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. Swastika Investment Ltd may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the Subject Company or third party in connection with the Research Report.
CORPORATE & ADMINISTRATIVE OFFICE - 48, Jaora Compound, M.Y.H. Road, Indore - 452 001 | Phone 0731 - 6644000
Compliance Officer: Ms. Sheetal Duraphe Email: compliance@swastika.co.inPhone: (0731) 6644 241
Swastika Investmart Limited, SEBI Reg. No. : NSE/BSE/MSEI: INZ000192732 Merchant Banking: INM000012102 Investment Adviser: INA000009843 MCX/NCDEX: INZ000072532 CDSL/NSDL: IN-DP-115-2015 RBI Reg. No.: B-03-00174 IRDA Reg. No.: 713.
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