Mahindra Life RI review - (Apply)

•    The company is a Mahindra Group company and is a pan-India real estate developer.
•    It’s a dividend paying company and posted profits for the last two fiscals.
•    It has many ongoing projects and is planning acquisitions in the segment to scale its operations.
•    Based on financial performance, the issue appears fully priced.
•    Investors may park funds for medium to long term.

PREFACE:
The RI is opening on June 02, 2025, and the offer document is dated May 19, 2025, but the documents were uploaded on BSE only on the morning of May 30, 2025. Thus, last minute info sharing is continuing unabatedly. This being a RI for Rs. 2996+ cr. but no merchant banker has mandate, which is highly surprising. 

ABOUT COMPANY:
Mahindra Lifespace Developers Ltd. (MLDL) is a pan-India real estate developer with 22.70 million sq. ft. of Saleable Area across our Completed Projects, 10.05 million sq. ft of Saleable Area across our Ongoing Projects, 2.73 million sq. ft. of Saleable Area across our Future Phases and 11.98 million sq. ft. of Saleable Area across our New Projects, as of March 31, 2025. It operates business through two verticals, namely, (i) residential projects, under the ‘Mahindra Lifespaces’ and ‘Mahindra Happinest’ brands (“Residential”); and (ii) integrated cities and industrial clusters under the ‘Mahindra World City’ and ‘Origins by Mahindra’ brands, respectively (“IC&IC”). It had Pre-sales of Rs. 2,803.56 crore in its Residential vertical in Fiscal 2025. Further, it had a Gross Area of 5,737 acres as part of IC&IC vertical in Fiscal 2025.

MLDL is a part of the Mahindra Group, which has a global presence across diverse business verticals, including automotive, farm equipment, technology, financial services, real estate, hospitality, logistics, renewable energy, and aerospace and defense. The Mahindra Group’s flagship entity, Mahindra and Mahindra Limited, is its Promoter and had a market capitalization of Rs. 3,315.68 billion as March 31, 2025 (based on the closing price of the Equity shares as of March 28, 2025, on the BSE). As part of the Mahindra Group, it strives to combine financial strength, operational excellence, and strategic vision to deliver eco-conscious real estate solutions. It is recognized as a "growth gem" by the Mahindra Group.

MLDL has a legacy of over two decades in real estate development, which is further demonstrated by its track record. Its developments are designed to foster connectivity, convenience, and quality of life, aiming to ensure that every project contributes meaningfully to the communities it serves. MLDL’s Residential developments emphasize functional, aesthetic designs, enhanced usability and comfort. Its expertise spans across large-scale residential townships, and integrated industrial ecosystems, offering a comprehensive approach to urbanization. As of March 31, 2025, its latest tally on projects stands as 49 completed, 14 ongoing, 7 future phases, 10 new projects and 3 pipelined projects. As of the said date, it had 699 employees on its payroll.

ISSUE DETAILS:
The company is coming out with a Rights Issue (RI) of 58220901 equity shares of Rs. 10 each at a fixed price of Rs. 257 per share to mobilize Rs. 1496.28 cr. The RI opens for subscription on June 02, 2025, and will close on June 16, 2025. The company is offering RI in the ratio of 3 for 8 to its eligible stakeholders as of the record date of May 23, 2025. The company is asking full money on application for the number of shares applied. Post allotment, shares will be listed on BSE and NSE. The company is spending Rs. 10.00 cr. for this RI and from the net proceeds, it will utilize Rs. 1005.00 cr. for repayment/prepayment of certain borrowings, Rs. 481.28 cr. for funding unidentified real estate projects acquisition and general corporate purposes. 

The RI is self-managed by the company itself, and KFin Technologies Ltd. is the registrar to the issue. 

Post-RI, company’s current paid-up capital of Rs. 155.26 cr. will stand enhanced to Rs. 213.48 cr. Based on the RI pricing, the company is looking for a market cap of Rs. 5486.35 cr. Considering forfeiture shares, the pre-RI and post-RI equity capital shall be 1551025470 equity shares and 2132660030 equity shares and market cap post RI shall be Rs. 5480.94 cr.

FINANCIAL PERFORMANCE:
On the financial performance front, for the last two fiscals, the company has (on a consolidated basis) posted total revenue/net profit of Rs. 279.12 cr. / Rs. 98.30 cr. (FY24), Rs. 463.87 cr. / Rs. 61.35 cr. (FY25). As of March 31, 2025, it had equity capital base of Rs. 155.10 cr. supported by free reserves and surplus of Rs. 1741.01 cr. and its NAV stood at Rs. 122.26 per share.

DIVIDEND POLICY:
The company has paid dividend of 20% (FY22), 23% (FY23), 26.5% (FY24), 28% (FY25). It will adopt a prudent dividend policy post listings of RI shares based on its financial performance and future prospects. 

SCRIP PERFORMANCE: BASED ON BSE WEBSITE DATA: SCRIP CODE: 532313 (FV Rs. 10).
The scrip last closed on cum-right basis at Rs. 367.30 on May 22, 2025, and opened on an ex-right basis at Rs. 343.05 on May 23, 2025. Since then, it has marked a high/low of Rs. 348.60 / Rs. 330.15. The scrip last closed at Rs. 347.35 as of May 30, 2025. For the last 52 weeks’ it has posted a high/low of Rs. 594.77 / Rs. 253.78. 

The promoters’ holding has been constant at 51.14% for the last three quarters ended with March 31, 2025. The counter is well managed above the RI price to lure investors.