Suraj Estate Developers Ltd IPO

The IPO opens on 18 Dec 2023 & closes on 20 Dec 2023.

Suraj Estate Developers Limited was originally incorporated as Suraj Estate Developers Private Limited', at Mumbai dated September 10, 1986 issued by the RoC. Subsequently, Company converted the status into a Public Limited dated October 30, 2021 and the name was changed to Suraj Estate Developers Limited' vide fresh Certificate of Incorporation w.e.f. December 9, 2021. Founded by the Promoter, Rajan M. Thomas, the Company is engaged in the business of real estate development. The Company has been involved in real estate business since 1986, and developed real estate across residential and commercial sectors in the South Central Mumbai region. It has a residential portfolio located in the markets of Mahim, Dadar, Prabhadevi and Parel, which are sub-markets of the South-Central Mumbai micro market where it established the presence. It is focused primarily on value luxury, luxury segments and commercial segment. In residential portfolio, it is present across the 'value luxury' and 'luxury' segments with unit values ranging from Rs. 10 million to Rs 130 million. In commercial portfolio, it constructed and sold built-to-suit corporate headquarters to institutional clientele, Saraswat Cooperative Bank Limited (Prabhadevi) and Clearing Corporation of India Limited (Dadar). The Company had launched 14 residential projects out of which 12 projects are redevelopment projects. Majority of projects executed by the Company are on land owned or through development agreements with land-owners. It completed 42 projects with a developed area of more than 1,046,543 sq. ft. in South Central Mumbai region. In addition to completed projects, it has 9 ongoing projects with a developable area of 1,970,445 square feet and saleable RERA carpet area 442,616 sq. ft. and 21 upcoming projects with an estimated carpet area of 928,400 sq. ft. In the Value Luxury Segment, the Company completed projects like St. Anthony Apartments (Mahim), Lumiere (Dadar) and Elizabeth Apartment (Dadar). It completed Mangirish (Dadar) and Tranquil Bay (Dadar) projects located to the Arabian Sea. In addition, it constructed and sold residential buildings for institutional clientele such Clearing Corporation of India Limited (Dadar) and other financial institutions. In year 1990, the Company completed a residential project, 'Suraj Venture A' located at Mahim, Mumbai. In 1992, it sold a residential building Vinayak Darshan' to a nationalized public sector bank at Dadar, Mumbai. In 1996, it sold a residential building known as Suraj Heights III' at Goregaon (East), Mumbai to a leading private sector bank. In 2000, the Company sold 'ICICI Apartments', a residential project at Kirti College Lane, Dadar (West), Mumbai to a leading private sector bank for senior officers. It sold NEAT House' in Dadar to a stock exchange. In 2005, it sold Gloriosa Apartment' at Dadar (West), Mumbai, to Clearing Corporation of India Limited for their senior officers. In 2007, the Company sold ICICI Apartments' located at Prabhadevi, Mumbai to a leading private sector bank as quarters for senior officials. In 2010, it sold Saraswat Bank Bhavan' located at Prabhadevi as corporate office for Saraswat Co-operative Bank Limited. In 2012, CCIL Bhavan' to suit commercial building at Dadar (West), Mumbai. Later in 2016, Accord Estates Private Limited, a Material Subsidiary, was formed with Runwal Realty Private Limited for development of a residential project known as Nirvana' located at Parel (East). In 2017, 'Palette', a flagship project located at Dadar was launched, which later on got into a luxury residential segment of the real estate market in South Central Mumbai. It also launched sea luxury project , 'Ocean Star' at Dadar (West). Through the launch of Louisandra' residential project in Dadar, Mumbai, the Company got into value luxury segment, which comprised 1 BHK and compact 2 BHK in the South Central Mumbai. It launched a luxury project, Ave Marie Apartments' at Dadar, Mumbai in 2019. In 2021, the Company purchased vacant land parcel at Tulsi Pipe Road from Tata Motors. It acquired investment from ICICI Ventures Funds Management Company for part financing project cost of newly launched value luxury project Suraj Eterna'. It launched residential value luxury projects like Vitalis' and Suraj Eterna' at L.J. Road, Mahim, Mumbai. In 2022, the Company launched 'Suraj Parkview 2' a residential value luxury project at Anant Patil Marg, Dadar (West). The Company launched an Initial Public Offer of 11,111,111 Equity Shares of Face Value of Rs 5/- each by raising funds from public aggregating to Rs 400 Crore through Fresh Issue in December, 2023. The Company launched a value luxury/luxury residential project Suraj Lumina' at Mahim West in 2024 and further, it launched Suraj Aureva', a premium residential project on 13th July, 2025 at Prabhadevi, South-Central Mumbai.

Suraj Estate Developers Ltd IPO will close on 20 Dec 2023.

<ul><li>The Company has established brand with a long standing presence in Value Luxury Segment and Luxury Segment in the residential real estate market of South Central Mumbai region;</li><li>The Company has diversified portfolio encompassing product offerings across various price points in value luxury and luxury segments;</li><li>The Company has expertise in tenant settlement in the redevelopment projects in residential sub-markets of Mahim, Matunga, Dadar, Prabhadevi, and Parel;</li><li>Its marketing and sales strategies</li><li>The Company has an experienced promoter and management team with its Chairperson and Managing Director who is also its Promoter, having over thirty six (36) years of experience in various aspects of real estate business.</li></ul>

<table class="table"> <thead> <tr> <th>S.No</th> <th>Promoters Name</th> <th>Pre Issue Shares</th> <th>Pre Issue Percentage</th> <th>Post Issue Shares</th> <th>Post Issue Percentage</th> </tr> </thead> <tbody> <tr> <td>1</td> <td>Rajan Meenathakonil Thomas</td> <td>27282000</td> <td>82.05</td> <td>27282000</td> <td>61.5</td> </tr> </tbody> </table>

<ul><li>Its business is dependent on the performance of, and the conditions affecting, the real estate sub markets in the South-Central Mumbai region. As of October 31, 2023, the company did not have any ongoing projects in any other areas apart from South Central Mumbai. Consequently, the company is exposed to risks from economic, regulatory and other changes as well as natural disasters in the South Central Mumbai region, which in turn may have an adverse effect on its business, results of operations, cash flows and financial condition.</li><li>Any uncertainty in its title to the company real estate assets could have a material adverse impact on its current and future revenue.</li><li>Its redevelopment projects require compliance of the provisions of Regulation 33(7) of the Development Control and Promotion Regulation, 2034. The compliance inter alia involves tenant settlement, approvals from MHADA & MCGM, construction of the tenant and saleable portion units.</li><li>Its Inability to complete the company Ongoing Projects and Upcoming Projects by their respective expected completion dates or at all could have a material adverse effect on its business, results of operations and financial condition.</li><li>As of October 31, 2023, the company has total 216 unsold units in its Ongoing Projects. If its not able to sell the company project inventories in a timely manner, then it may adversely affect its business, results of operations and financial condition.</li><li>As of October 31, 2023, the company had 16 Upcoming Projects which are in the preliminary stages of planning and require approvals and renewals of certain approvals from Brihan mumbai Municipal Corporation for its projects that are typically valid for one year from the date of approval. Any difficulties in fulfilling certain conditions precedent in respect of those projects, and any delay or failure to obtain required approvals or renewal of approvals may require it to reschedule its Ongoing Projects and Upcoming Projects which may have adverse effect on its operations. Further, the Company has to stop the construction activity in the event of withdrawal of such licenses/approval.</li><li>Its business is subject to seasonality and its may experience difficulties in expanding the company's business into additional geographical markets including MMR region which may contribute to fluctuations in its results of operations and financial condition.</li><li>The industry in which its operate is competitive and highly fragmented resulting in increased competition that may adversely affect its results.</li><li>Any negative cash flows in the future would adversely affect its cash flow requirements, which may adversely affect the company's ability to operate its business and implement its growth plans, thereby affecting its financial condition.</li><li>Its Statutory Auditors have included certain matters of emphasis in the company's Financial Statements.</li><li>The Company was incorporated in 1986 and certain documents filed by it with the RoC and certain corporate records and other documents, are not traceable. The company cannot assure you that such forms or records will be available at all or any time in the future.</li><li>The company intend to utilise a portion of the Net Proceeds for repayment/ prepayment, in full or part, of borrowings availed by its Subsidiaries, Accord Estates Private Limited, Skyline Realry Private Limited and Iconic Property Developers Private Limited and Iconic Property Developers Private Limited does not contribute in its consolidated revenues from operation during the Fiscals 2021, 2022 and 2023 and three months' period ended on June 30, 2023.</li><li>Its business is capital intensive and requires the company to incur expenditure for land acquisition and development and the company have incurred expenditure of Rs. 834.42 million, Rs. 2,646.78 million, Rs. 2,377.56 million and Rs.2,349.52 million in the three month period ended on June 30, 2023 and Fiscals 2023, 2022 and 2021 respectively. Therefore, the company is heavily dependent on the availability of real estate financing, which may not be available on terms acceptable to it in a timely manner or at all.</li><li>The company is subject to extensive statutory or governmental regulations, including the Real Estate (Regulation and Development) Act, 2016 (the "RERA") and change in laws, rules, regulations and legal uncertainties, including the withdrawal of certain benefits or adverse application of tax laws or any non-compliance of any applicable law, may adversely affect its business, prospects and results of operations.</li><li>As on September 30, 2023, the total unsecured loans stood at Rs. 774.35 million which is 13.61 % of the total loans availed by the Company (including outstanding Non fund based facility of Rs. 137.28 million). The unsecured loans taken by the Company may be recalled by the respective lenders at any time.</li><li>If the company is unable to collect its loans and advances from related parties, the company results of operations and cash flows could be materially adversely affected.</li><li>Its redevelopment projects have long gestation periods and any delays and cost overruns in relation to its Ongoing Projects and Upcoming Projects could adversely affect its prospects, business and results of operations. If the company is unable to complete its projects in a timely manner or at all, it would adversely affect its business prospects, financial conditions and results of operations.</li><li>Any variation in the utilisation of the Net Proceeds would be subject to certain compliance requirements, including prior Shareholders' approval.</li><li>Its indebtedness and the conditions and restrictions imposed by its financing agreements could adversely affect the company ability to conduct its business and operations.</li><li>Sujatha R. Thomas, a member of the Promoter Group and its Non - Executive Director have interests in the Company other than reimbursement of expenses incurred and normal remuneration or benefits.</li><li>The company have, in the past, entered into certain transactions with related parties and may continue to do so in the future. Any related party transactions that are not on an arm's length basis may adversely affect its business, results of operation and financial condition.</li><li>The company has certain contingent liabilities, which if they materialize, may adversely affect its business, financial condition and results of operations.</li><li>Its may not be able to successfully identify and acquire suitable land or development rights, which may affect its business and growth prospects.</li><li>There have been certain instances of delays in PF and ESIC payments by the Company and its Subsidiaries in the past. The company may be subject to regulatory actions and penalties for any such delays.</li><li>The company has not obtained occupation certificate for 16 flats of 4 (four) of its completed projects which include projects Ocean Star - II, Harmony, Jacob Apartments and Gloriosa Apartments. The company is required to meet the provisions of the Development Control and Promotion Regulations, 2034 ("DCPR, 2034") as amended from time to time, which may require it to incur additional costs and as a result may have an adverse effect on its business.</li><li>Information included in this Red Herring Prospectus, including the measurements with respect to the estimated Developable Area of its projects, estimated Carpet Area of the company projects and the expected launch and completion dates of its projects, is based on assumptions and estimates which may change for various reasons.</li><li>Increases in prices (including for increase in taxes and levies) or shortage of or delay or disruption in supply of, construction materials, contract labour and equipment could adversely affect its estimated construction cost and timelines resulting in cost overruns.</li><li>The company has not entered into any definitive agreements to use a portion of the proceeds of the Issue and may invest or spend the proceeds of the Issue in ways with which you may not agree.</li><li>The Company's ability to pay dividends in the future will depend on the Company's earnings, financial condition, working capital requirements, capital expenditures and restrictive covenants of the Company's financing arrangements.</li><li>Some or all of its outstanding receivables against the bookings may not be received in the future which may adversely affect its business prospects, financial conditions and results of operations.</li><li>The company is dependent on a number of key personnel, and the loss of or its inability to attract or retain such persons could adversely affect its business, results of operations and financial condition.</li><li>Its Net Profit and Earning per share changed substantially in preceding three years.</li><li>If the company is unable to collect its dues and receivables from its customers in accordance to the terms and conditions of the contracts and the payment schedules, its business, results of operations or financial condition could be materially and adversely affected.</li><li>Its Subsidiaries are involved in certain legal proceedings, any adverse developments related to which could adversely affect its business, reputation and cash flows.</li><li>The company has reversed some of the revenue recognised in prior periods as a result of cancelled bookings for certain of its projects and may be required to do so in the future.</li><li>As on October 31, 2023, 3 Ongoing Projects, 7 Upcoming Projects are operated by its Subsidiaries and 6 Land Reserves are held by the company's Subsidiaries and for which its have pledged 100% of total issued and paid up share capital of one of its Subsidiary Skyline Realty Private Limited to secure financing. In the event of a default in its financing agreements, pledge may be invoked and its shareholding in Skyline Realty Private Limited may be diluted which may have an adverse impact on the business and financial position of the Company and/or its Subsidiaries concerned.</li><li>As on October 31, 2023, 6 Land Reserves are held by its Subsidiaries.</li><li>Its Subsidiaries have contributed marginally to the company revenue from operations during three months' period ended on June 30, 2023 and the Fiscal 2023, 2022 and 2021.</li><li>Its Subsidiaries have incurred losses in the last three Fiscals and may do so in the future, which could have a material adverse effect on its business, prospects, financial condition, cash flows and results of operations.</li><li>Problems pertaining to clearance of encroachment especially in case of redevelopment projects could have a material adverse effect on its business, results of operations and financial condition.</li><li>The Company does not provide any construction services on its own and is 100% dependent on third party contractors for the construction services of its Projects. Any failure on their part to perform their obligations could adversely affect its business, results of operations and cash flows.</li><li>There have been certain instances of delays in filing of GST returns of the Company in the past. Its may be subject to regulatory actions and penalties for any such delays and its business, financial condition and reputation may be adversely affected.</li><li>Industry information included in this Red Herring Prospectus has been derived from an industry report commissioned and paid by Company for such purpose. There can be no assurance that such third-party statistical, financial and other industry information is either complete or accurate.</li><li>The company has applied for registrations of certain intellectual property rights and any failure to enforce its rights could have an adverse effect on its business prospects.</li><li>Its Registered and Corporate Office are on leave and license basis. Failure to comply with the conditions of the use of such property could result in an adverse impact on its business and operations. Further there can be no assurances that these leave and license agreements will be renewed upon termination or that its will be able to obtain other premises on lease on same or similar commercial terms.</li><li>Pursuant to listing of the Equity shares, its may be subject to pre-emptive surveillance measures like additional Surveillance Measures ("ASM") and Graded Surveillance Measures ("GSM") by the Stock Exchanges in the order to enhance market integrity and safeguard the interest of the investors.</li><li>Its development projects may require additional FSI (TDRs) which may not be available or may not be available at the expected price.</li><li>Its may suffer uninsured losses or experience losses exceeding its insurance limits, which may have a material adverse effect on its business, financial condition and results of operations.</li><li>There are certain outstanding litigation proceedings involving the Company, Subsidiaries, Directors and Promoter. Any adverse outcome in such proceedings may have a material adverse impact on its reputation, business, financial condition, results of operations and cash flows.</li><li>Its Promoter, certain members of the Promoter Group and Directors and related entities have interests in number of ventures, which are in businesses similar to its and this may result in potential conflicts of interest with it.</li><li>Its Promoter and certain members of Promoter Group and Directors hold Equity Shares in the Company and are therefore interested in the Company's performance in addition to their normal remuneration and reimbursement of expenses.</li><li>Its will continue to be controlled by the company Promoter and certain members of its Promoter Group after the completion of the Issue.</li><li>The company is subject to risks in relation to sales made prior to completion of our projects, and an inability to presell may adversely affect recovery of its capital outlay.</li><li>Its business involves development and redevelopment of residential projects. The success of its business is therefore dependent on its ability to anticipate and respond to consumer preferences and requirements.</li><li>The Income Tax Department has conducted a "search, survey and seizure operation" at its Registered and Corporate Office and Office of the company's Subsidiary, Accord Estates Private Limited. Any adverse outcome of such proceedings may have an adverse effect on its business, financial condition and result of operations.</li><li>Work stoppages, shortage of labour and other labour problems could adversely affect its business. Further, its operations are dependent on contract labour and an inability to access adequate contract labour at reasonable costs at our project sites may adversely affect its business prospects and results of operations.</li><li>Its may be subject to third-party indemnification or liability claims, which may adversely affect its business, cash flows, results of operations and reputation.</li><li>Redevelopment projects are subject to certain risks involving existing tenants and applicable Government regulations.</li><li>Its business and growth plan could be adversely affected by the incidence and change in the rate of property taxes and stamp duties.</li><li>Its bids may not always be accepted for housing society redevelopment projects. Its may not be able to qualify for, compete and win for redevelopment projects, which could adversely affect its business and results of operations.</li><li>Sales of its projects may be adversely affected by the ability of the company prospective customers to purchase property which is dependent on availability of financing to potential customers.</li><li>Failure to successfully implement its business strategies and its development plans may materially and adversely affect the company's business prospects, financial conditions and results of operations.</li><li>The company relies on various contractors or third parties in developing all its projects, and factors affecting the performance of their obligations could adversely affect its projects.</li><li>Non-compliance with, and changes in, safety, health and environmental laws could adversely affect its projects.</li><li>In the event that the company is unable to acquire lands for which its have entered into agreements for purchase or similar arrangements, or such agreements are held to be invalid or expire, its may not be able to acquire the land and may also lose advances paid towards acquisition of such lands.</li><li>The company relies on its information technology systems for its operations and its reliability and functionality is critical to the success of its business.</li><li>Changes in technology may affect its business by making its construction and development capabilities less competitive or obsolete.</li><li>Its operations and the workforce, customers and/ or third parties on property sites are exposed to various hazards, which could adversely affect its business, financial condition and results of operations.</li><li>Fraud or improper conduct may delay the development of a project and adversely affect its business and results of operations.</li></ul>

The Issue type of Suraj Estate Developers Ltd is Book Building.

The minimum application for shares of Suraj Estate Developers Ltd is 41.

The total shares issue of Suraj Estate Developers Ltd is 11111111.

Initial public offering of 11,111,111^ equity shares of face value Rs. 5 each ("Equity Shares") of Suraj Estate Developers Limited ("The Company" or the "Issuer") for cash at a price of Rs. 360 per equity share (including a securities premium of Rs. 355 per equity share) ("Issue Price"), aggregating to Rs. 400.00 crores^ (the "Issue"). The issue constitutes 25.05% of the post-issue paid-up equity share capital of the company. The face value of equity shares is Rs. 5 each. The issue price is 72 times the face value of the equity shares. ^Subject to finalization basis the allotment