Grand Housing Limited IPO

01At a glance

What the company does — acquires land around Chennai, builds basic infrastructure such as roads, power, sewage and water supply, and sells it as plots: residential plots of 600 to 2,400 sq. ft. at ₹1,500 to ₹5,000 per sq. ft., and industrial plots of 2 to 9 acres at ₹5 million to ₹30 million per acre (DRHP p.23, DRHP p.143).

Who pays it — homeowners who build houses and villas on residential plots, and enterprises that build factories and warehouses on industrial plots (DRHP p.23, DRHP p.143). Industrial plots were 42% of FY25 revenue, up from 7% in FY23 (DRHP p.147).

Why it is raising money — it is not. The offer is entirely a sale of shares by Vijay Surana J, and the company receives no proceeds (DRHP p.24).

How fast it has grown — revenue of ₹946 million in FY23, ₹1,560 million in FY24 and ₹1,567 million in FY25 (DRHP p.25).

The one thing to understand — very high margins on land, with cash tied up in more land. EBITDA margin rose to 66.93% in FY25, but operating cash flow was negative ₹644.71 million that year as the company bought ₹1,527.98 million of trade property (DRHP p.69, DRHP p.70, DRHP p.99).

02The business, in plain words

A plotted-land developer buys raw land, lays roads and utilities, gets approvals, divides it into plots and sells them; for industrial plots the main work is building roads (DRHP p.143).

An enterprise wants 5 acres near Chennai for a warehouse → Grand Housing offers a parcel from one of its industrial layouts → the enterprise pays for the plot → the company records the sale as revenue.

It had 39 completed, 13 ongoing and 7 upcoming projects at March 2025, all in and around Chennai (DRHP p.37).

Earnings equation: Profit ≈ area sold × (price per sq. ft. − land and development cost) − overheads − interest. In FY25 it sold 207 plots covering 1.41 million sq. ft. (DRHP p.99).

03Where the money comes from

Source: DRHP p.99, DRHP p.147. The company says it shifted towards industrial plots from FY24 because they need less infrastructure and fewer government approvals (DRHP p.147).

04The growth record

Source: DRHP p.25, DRHP p.70, DRHP p.99.

05What the growth is made of

Margin, not volume, in FY25. Revenue was flat while area sold fell from 1.94 to 1.41 million sq. ft. and EBITDA rose 34% (our arithmetic, DRHP p.99). Other income rose from ₹3.39 million in FY23 to ₹182.50 million in FY25; interest received was ₹169.86 million in FY25 (DRHP p.69, DRHP p.70).

06Earnings quality

Operating cash flow over FY23 to FY25 was ₹192.93 million against profit of ₹1,739.33 million (our arithmetic, DRHP p.25, DRHP p.70). Of FY25 profit, ₹92.29 million belongs to non-controlling interests in subsidiaries; profit attributable to the company's owners was ₹753.56 million (DRHP p.218). Non-controlling interest in equity rose from ₹3.09 million in FY23 to ₹608.44 million in FY25 (DRHP p.217).

07The balance sheet

Source: DRHP p.25, DRHP p.99. Net worth excludes non-controlling interest (DRHP p.25).

08What the money is for

Source: DRHP p.24.

09Who is selling

Source: DRHP p.24. The shares offered are 11.12% of the company's equity (our arithmetic).

10Promoters

The promoters are Vijay Surana J, chairman and managing director and a director since 29 March 2012, and Suyash Surana and Chavi Jain, son and daughter of Vijay Surana J (DRHP p.23, DRHP p.182, DRHP p.204). Related-party tables show the company borrowing ₹906.85 million from Ghisuba Capital Holdings Private Limited, an enterprise over which key managerial personnel have significant influence, in FY25 and repaying ₹674.92 million; FY23 borrowings from it were ₹2,986.34 million (DRHP p.28). Two subsidiaries, Winsun Properties Private Limited and Ultra Magnum Private Limited, lent Ghisuba ₹168.33 million and ₹147.55 million in FY25 (DRHP p.8, DRHP p.31, DRHP p.32).

11Who already owns it

Source: DRHP p.24. The last row is our arithmetic.

12What changed just before the IPO

• Industrial shift — industrial plots up to 42% of revenue (DRHP p.147).
• Land buying — ₹1,527.98 million of trade property bought in FY25 (DRHP p.69).
• Share capital — up from ₹399 million to ₹1,596 million in FY25 (DRHP p.25).

13Capacity and expansion

The land reserve is the capacity. The text gives land reserves of about 83,134,781 sq. ft., or 1,908.52 acres, at March 2025, but the table beneath it lists ten parcels totalling 2,672,123 sq. ft., or 61.34 acres (DRHP p.155). Some of the land is subject to litigation (DRHP p.155).

14Market size and industry structure

The CRISIL report cited in the offer document says land values in Chennai's peripheral areas rose about 13% a year over FY2021–2025 and describes plotted development there as moving from local players to organised developers (DRHP p.23). The report's figures are CRISIL's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• A long record — 39 completed projects around Chennai (DRHP p.37).
• Industrial plots with quicker turnaround (DRHP p.147).

Against that: dependence on one city, on buying land, on contractors, and on collecting from customers (DRHP p.27).

16Peers the company named

None. The document says no listed Indian company has a similar business, so no peer P/E is given (DRHP p.97, DRHP p.98).

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• Chennai. All projects and land are there (DRHP p.37).
• Land. Advances may be lost if purchases fail (DRHP p.27).
• Deferred payments. Some land is paid for later (DRHP p.40).
• Delays. Long gestation and cost overruns (DRHP p.27).
• Collections. Customers may pay late (DRHP p.27).

18Litigation and regulatory matters

Source: DRHP p.26. The tax matter relates to assessment year 2013-14 (DRHP p.27).

19Related-party transactions

Beyond Ghisuba, the company gave advances to several related enterprises, including ₹292.50 million to Suyash Land Developers Private Limited in FY23 and ₹93.70 million in FY24 (DRHP p.29). In FY24 it bought property for ₹60.50 million from Jayanthilal Vijay Surana, listed as key managerial personnel (DRHP p.29).

20What the offer document does not say

In the sections read for this study, the document does not give:

• Which land-reserve figure is right — 1,908.52 acres or 61.34 acres (DRHP p.155).
• Why the company borrows from and lends to Ghisuba in the same year, in the pages read.
• Who the industrial customers are, or how concentrated they are, in the pages read.
• Who holds the non-controlling interests, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Are land reserves 1,908.52 acres or 61.34 acres?
2. Why do subsidiaries lend to Ghisuba Capital Holdings while the company borrows from it?
3. What earned ₹169.86 million of interest in FY25?
4. How much of FY25 industrial revenue came from a few buyers?
5. Why is the promoter selling now, with no money going to the company?

1Sources and cited facts

This study was read from 1 document the company filed. The 29 figures it cites are listed under the document each came from, with the page and the sentence as printed.