i. Pradeep Kumar Aggarwal is the Chairman and Whole-time Director of the Company. He has completed his senior secondary education from Motiram Baburam Inter College, Haldwani, Nainital affiliated to Uttarakhand Board. He was previously associated with Paywell Securities Private Limited for five years. Further he has served as managing director on the board of directors of SMC Comtrade Limited, a subsidiary of SMC Global Securities Limited for a period of 10 years and was responsible for overseeing the financial capital market and commodity market segments. Further, he was also associated with SMC Global Securities Limited for a period of over 10 years. 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. ii. Lalit Kumar Aggarwal is the Vice Chairman and Whole-time Director of the Company. He has completed his senior secondary education from Central Board of Secondary Education, Delhi. He has been awarded with a certificate of home nursing in the year 1988 from Saint John Ambulance Association. He was associated with Signatureglobal Comtrade Private Limited (previously known as P.P. Comtrade Private Limited) for six years. He was also associated with SMC Comtrade Limited for seven years where he was responsible for overseeing the arbitrage business. He also served as a whole-time director on the board of SMC Real Estate Advisors Private Limited for a period of over two years and was responsible for overseeing the real estate market segment. 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. iii. Ravi Aggarwal is the Managing Director of the Company. He is a fellow member of the Institute of Chartered Accountants of India. He was previously associated with Paywell Securities Private Limited for a year. Further, he was associated for over a year with SAM Global Securities Limited which was merged with SMC Global Securities Limited, where he was responsible for operations relating to arbitrage and share brokerage distribution respectively. He served as a director on the board of SMC Insurance Brokers Private Limited for a period of over five years and his role included overall business development and distribution of insurance segments. He has over nine years of experience in real estate industry. He has been appointed as a director on the Board of the Company since November 5, 2015.  

A. Balance Sheet

Particular (In Million)	Mar-21	Mar-22	Mar-23
Equity Share Capital	56.88	113.76	124.85
Reserves	-2,126	-3,636	351
Borrowings	11,764	11,575	17,097
Trade Payables	3,306	7,924	10,066
Other Liabilities	24,623	28,331	32,353
Total Liabilities	39,692	47,831	59,516
Net Block	651	693	612
Capital Work in Progress	0	0	4
Investments	460	640	585
Other Assets	2,404	2,629	2,136
Total NC Assets	3,515	3,962	3,337
Receivables	148	42	283
Inventory	27,702	33,921	44,058
Cash & Bank	2,919	2,911	6,720
Other Assets	3,340	3,473	5,594
Face value	1	1	1

B. Profit & Loss Statement

Particular (In Million)	Mar-21	Mar-22	Mar-23
Sales	821	9,013	15,536
Raw Material Cost	664	8,199	12,551
Purchases of Stock In Trade	4	2	9
Other Mfr. Exp	12	154	597
Employee Cost	432	640	885
Other Expenses	528	866	1,434
Other Income	727	383	323
Depreciation	118	207	222
EBITDA	-92	-466	384
EBITDA Margin	-11.27%	-5.17%	2.47%
Interest	709	691	729
Profit before tax	-975	-1,364	-568
Tax	-112	-209	70
Net Loss	-863	-1,155	-637
NPM (%)	-55.76%	-12.29%	-4.02%

C. Cash Flow Statement

Particular (In Million)	Mar-21	Mar-22	Mar-23
Cash From Operating Activity
Profit From Operation	-766	-553	808
Receivable	144	94	-241
Inventory	-4,974	-1,585	-6,908
Payable	-374	1,265	588
Other WC Items	6,261	2,863	3,135
Working Capital Changes	1,058	2,637	-3,427
Direct Taxes	72	-32	-163
Net Cash Inflow from Operating Activity	364	2052	-2782
Cash from Investing Activity
Fixed assets purchased	-528	-894	-189
Fixed assets sold	0.4	3	31
Investments purchased	-28	-529	-3
Investment sold	106	716	60
Dividends received	13	6	0.8
Other investing items	174	1,236	176
Net cash inflow from investing activities	-262	538	76
Cash from Financing Activity
Proceeds from borrowings	4,713	3,986	14,662
Repayment of borrowings	-2,579	-4,164	-5,535
Intrest paid fin	-1,141	-2,474	-2,353
Other financing items	-28	-34	-0.3
Net Cash Flow	1067	-95	4029

 

Name of the Company	Revenue (In Crore)	PAT (In Crore)	EPS ( in Rs)	P/E	CMP	Mcap (In Crore)
Signatureglobal (India) Limited	1554	-64	-4.53	-84.9	385	5410
DLF Limited	5695	2,034	8.22	63.0	532	1,31,724
Godrej Properties Limited	2,252	621	20.6	71	1,655	46,011
Macrotech Developers Limited	9,470	490	5.05	50.5	797	76,830
Prestige Estates Projects Limited	8,315	1,067	23.49	27	621	24,888
Sobha Limited	3,310	104	10.99	58.1	684	6,489

* All the data is as per FY23.

Review and Recommendation of Signature Global IPO by IZ team is 4/10

A) Business Overview:

Strengths: 1.Dominant Player: Signature Global is the largest real estate development company in Delhi NCR in the affordable and mid-segment housing category. This gives it a competitive edge in terms of market share, which stands at 19%. 2. Rapid Growth: The company has achieved a CAGR of 142.62% in sales, which is phenomenal. 3. Policy Alignment: The company’s focus on government policies like AHP and DDJAY-APHP signifies strategic alignment with macroeconomic factors. 4. Strong Distribution Network: With 484 channel partners and specialized in-house teams, the company seems well-equipped to handle both direct and indirect sales.

B) Object of the Issue:

1. Debt Repayment: A key objective is to repay or pre-pay borrowings, which could improve the balance sheet. 2. Funds Infusion: Infusing funds into subsidiaries also indicates a multi-pronged growth strategy. 3. Inorganic Growth: The company aims to acquire lands, suggesting plans for geographical or vertical expansion.

C) Management

1. Pradeep Kumar Aggarwal: With over eight years in the real estate sector and prior experience in financial markets, he seems to be a well-rounded leader. 2. Lalit Kumar Aggarwal: His seven years of real estate experience and additional role in arbitrage business suggest a balanced expertise in real estate and finance. 3. Ravi Aggarwal: As a Chartered Accountant with nine years in real estate, he brings financial acumen to the team.

D) Financials

1. Borrowings: Increasing borrowings may indicate growing leverage, which could be a concern. 2. Profit & Loss: The company is yet to break even but the EBITDA margin has turned positive recently, which could be a sign of operational improvement. 3. Cash Flows: Negative cash flow from operating activities in Mar-23 is concerning and warrants a deeper look.

E) Peers Analysis

1. Revenue: Signature Global's revenue is on the lower end compared to peers like DLF and Godrej Properties. 2. PAT and EPS: Currently in a loss-making stage, it lags behind peers who are profitable. 3. P/E and Mcap: Negative P/E indicates market skepticism about profitability, while the market capitalization is also lower compared to giants like DLF.

F) Valuation

The issue price of ₹366 to ₹385 per equity share seems to be in the affordable range, but considering the financials and peer comparison, the valuation looks on higher side. Plus company is still in losses.

Conclusion

Signature Global appears to be a fast-growing player in the affordable housing segment with a strong distribution network. However, there are financial health concerns and it lags behind peers in some key metrics. Investors should weigh these factors carefully before making an investment decision.

Signatureglobal (India) Limited 13th Floor, Dr. Gopal Das Bhawan, 28 Barakhamba Road, Connaught Place, New Delhi 110 001 Phone: +91 11 4928 1700 Email: cs@signatureglobal.in Website: http://www.signatureglobal.in/