Runwal Enterprises Limited IPO

01At a glance

What the company does: buys land, builds and sells homes, and builds and leases shops, offices and schools, across the eastern, central, south central and western suburbs of Mumbai (RHP p.188).

Who pays it: home buyers, who pay in instalments through construction, and tenants of its retail and commercial space (RHP p.188, RHP p.189). It sold 2,182 units for ₹23,535.05 million in Fiscal 2026 and collected ₹18,546.13 million (RHP p.120).

Why it is raising money: ₹1,000.00 million repays the company's own borrowings and ₹2,250.00 million goes to two wholly owned subsidiaries, Runwal Residency and Evie Real Estate, to repay theirs; the rest funds future project acquisitions and general corporate purposes (RHP p.104, RHP p.105).

How fast it has grown: revenue fell from ₹24,088.65 million in FY24 to ₹17,989.49 million in FY26, about 13.6% a year, while profit after tax rose from ₹937.00 million to ₹1,857.63 million, about 40.8% a year (our arithmetic, RHP p.76).

The one thing to understand: revenue in this business is recognised on completion, not on sale, so the reported line moves with deliveries rather than demand. Sales value rose from ₹15,276.41 million to ₹23,535.05 million over the same three years while revenue fell, and net debt rose from ₹16,312.27 million to ₹27,781.10 million (RHP p.120).

02The business, in plain words

Runwal Enterprises identifies and acquires land in and around Mumbai, obtains approvals, designs and builds, and sells apartments and commercial space, partly on its own land and partly under joint development agreements (RHP p.188). It also holds and leases retail and commercial units (RHP p.189). At March 2026 it had 19 completed projects, 28 ongoing and 33 upcoming, a developable area of 88.37 million square feet including estimated area on upcoming projects, of which 74.58 million square feet is residential and 13.80 million square feet is not (RHP p.188, RHP p.189).

A home buyer books a flat in an under-construction Runwal project → pays in instalments as the building rises → the company spends that money on land, approvals and construction → revenue and profit are recognised when the project is handed over, so cash comes in years before the profit is booked.

The group traces to the Runwal group founded in 1978 by Subhash Runwal; this company emerged as a separate entity in 2016 under Subodh Subhash Runwal (RHP p.188). Greenfield land is 94.56% of the project pipeline by developable area (RHP p.188). All ongoing and upcoming projects are in Mumbai (RHP p.407).

Earnings equation: Profit ≈ square feet handed over × (realisation − land and construction cost) − overheads − interest not capitalised. In Fiscal 2026 the average sale price was ₹11,365.98 a square foot, sales area 2.07 million square feet and gross margin 33.48% (RHP p.120).

03Where the money comes from

Source: RHP p.76, RHP p.120.

The portfolio is 84.39% residential and 15.61% not, by developable area (RHP p.189). The prospectus does not break revenue down by project or by segment in the pages read. Revenue does not depend on a few customers, because units are sold to individual buyers; it depends on one city. All ongoing and upcoming projects are within Mumbai (RHP p.407), and the prospectus's own market-share claim is for a single micro-market, Kalyan and Dombivli (RHP p.188).

04The growth record

Source: RHP p.76, RHP p.77, RHP p.120.

Net debt was ₹16,312.27 million, ₹22,506.60 million and ₹27,781.10 million, and the net debt to equity ratio 3.62, 4.64 and 3.29 (RHP p.120). Gross margin was 19.69%, 35.90% and 33.48% (RHP p.120). Our arithmetic: revenue fell about 13.6% a year from FY24 to FY26 while profit after tax rose about 40.8% a year, and the EBITDA margin rose 1,107 basis points (RHP p.76, RHP p.120). Return on net worth was 27.24% in FY26 (RHP p.119). Other income was ₹518.44 million in FY26, 23.2% of profit before tax of ₹2,239.15 million (our arithmetic, RHP p.76).

05What the growth is made of

Revenue is not a measure of how much the company sold. Sales value rose from ₹15,276.41 million in FY24 to ₹23,535.05 million in FY26, units sold from 1,688 to 2,182 and sales area from 1.62 to 2.07 million square feet, while revenue fell, because revenue follows deliveries and deliveries fell from 2.23 to 1.17 million square feet (RHP p.120).

The profit increase came from margin: gross margin went from 19.69% in FY24 to 33.48% in FY26, and the average sale price from ₹9,429.65 to ₹11,365.98 a square foot (RHP p.120). Volume, price and mix therefore all moved, but the prospectus does not give a project-level split of revenue, so the increase in gross margin cannot be attributed to particular projects.

06Earnings quality

The item that needs explaining is the gap between interest charged and interest paid. Finance costs in the profit and loss were ₹1,151.55 million in FY26, while ₹2,729.00 million of interest was actually paid (RHP p.76, RHP p.77). The difference is interest capitalised into inventory, which is normal for a developer and is the reason inventory rose to ₹84,508.35 million: it carries land, construction and the cost of financing both until handover (RHP p.75). The same accounting is why operating cash flow has been negative in each of the three years even as profit rose: ₹13,971.70 million went into inventory in FY26 alone (RHP p.77).

07The balance sheet

At March 2026, non-current borrowings were ₹16,275.05 million and current borrowings ₹12,816.23 million (RHP p.75). Cash and cash equivalents were ₹2,012.64 million and other bank balances ₹739.41 million; the prospectus states net debt of ₹27,781.10 million and a net debt to equity ratio of 3.29 (RHP p.75, RHP p.120). Inventories were ₹84,508.35 million and other current liabilities, which carry customer advances, ₹56,406.42 million (RHP p.75). Total equity was ₹8,448.16 million, of which ₹112.79 million is non-controlling interest (RHP p.75).

Contingent liabilities at March 2026 are stated as ₹79,800.81 million in total, but the total mixes items of different kinds: direct and indirect tax matters in dispute ₹6,292.78 million, corporate guarantees given ₹18,400.00 million, a personal guarantee received of ₹54,900.00 million, claims not acknowledged as debt ₹70.47 million, contractual agreements ₹114.63 million, bank guarantees ₹21.66 million and a MahaRERA matter of ₹1.27 million (RHP p.78). The corporate guarantees are for loans to Runwal Real Estates, Wheelabrator Realty and Runwal Residency (RHP p.78).

After the issue: ₹3,250.00 million of the ₹5,000.00 million fresh issue repays borrowings of the company and of two subsidiaries, which on the March 2026 net debt of ₹27,781.10 million would leave about ₹24,531.10 million (our arithmetic, RHP p.105, RHP p.120).

08What the money is for

Source: RHP p.104, RHP p.105; the percentages are our arithmetic. Both repayments are scheduled for Fiscal 2027 (RHP p.105). Project acquisitions and general corporate purposes together cannot exceed 35% of gross proceeds, and neither alone more than 25% (RHP p.105). Prepayment charges, where lenders levy them, are also to come out of the net proceeds (RHP p.106). The deployment has not been appraised by any bank, financial institution or independent agency (RHP p.105).

Into the business ₹5,000.00 million, the whole issue (RHP p.72). To selling shareholders nothing: there is no offer for sale (RHP p.72).

09Who is selling

No one. The issue is entirely new shares issued by the company (RHP p.72). Up to ₹35.00 million of it is reserved for eligible employees (RHP p.72).

10Promoters

The promoter is Subodh Subhash Runwal, who holds 106,281,849 shares, 80.89% of the capital before the issue, and is Chairman and Managing Director (RHP p.99, RHP p.5). Experience in the business dates from joining Wheelabrator Alloy Castings Limited in 1995, and this company emerged as a separate entity of the Runwal group in 2016 (RHP p.188).

Promoter economics: the holding came from a bonus issue of 2,500 shares for every one held, on February 27, 2021, which took 10,000 shares to 25,010,000, followed by the split of the ₹10 face value into ₹2 on November 4, 2024 (RHP p.92).

There has been no primary issuance or secondary sale of 5% or more of the capital in the 18 months before the prospectus, so the prospectus reports no weighted average cost of acquisition for those windows (RHP p.123).

Salary paid to Subodh Subhash Runwal was ₹30.00 million in FY24, ₹29.53 million in FY25 and ₹29.42 million in FY26; Snehal Subodh Runwal and Sidharth Runwal, of the promoter group, were paid ₹27.02 million and ₹24.02 million in FY26 (RHP p.79).

Pledges: 37,515,000 shares had been pledged and a non-disposal undertaking given over 68,766,849 shares, as security for a loan from IndusInd Bank; the lender released 5,470,625 pledged shares and 37,515,000 shares from the undertaking in March 2025 to meet minimum promoter contribution rules (RHP p.98). Six criminal and six tax proceedings are pending against the promoter, and no disciplinary action has been taken by SEBI or the stock exchanges in the last five years (RHP p.50).

11Who already owns it

Source: RHP p.98, RHP p.99. The company has eight shareholders (RHP p.98). HDFC Capital Affordable Real Estate Fund - 3 subscribed 1,500 compulsorily convertible debentures of ₹1,000,000 each, ₹1,500.00 million in all, on October 19, 2024, and those were converted into 6,341,436 shares on August 28, 2026, at a ratio of 4,227.624 shares per debenture; no convertibles remain outstanding (RHP p.92). There has been no pre-IPO placement (RHP p.102). At the upper band, promoter and promoter group holding would fall to about 84.5% after the issue (our arithmetic, RHP p.98).

12What changed just before the IPO

• The company was converted from a private company to a public company on September 3, 2024, and renamed Runwal Enterprises Limited on October 4, 2024 (RHP p.3).
• The face value was split from ₹10 to ₹2 on November 4, 2024 (RHP p.92).
• ₹1,500.00 million of compulsorily convertible debentures was issued to HDFC Capital Affordable Real Estate Fund - 3 in October 2024 and converted into equity on August 28, 2026 (RHP p.92).
• 10,002,998 shares were gifted to Subhash Suganlal Runwal in January 2025, and further shares to Chanda Subhash Runwal (RHP p.95, RHP p.99).
• IndusInd Bank released 5,470,625 pledged shares and 37,515,000 shares under a non-disposal undertaking in March 2025, to meet minimum promoter contribution rules (RHP p.98).
• Net debt rose from ₹16,312.27 million at March 2024 to ₹27,781.10 million at March 2026 (RHP p.120).
• Inventory rose from ₹59,405.50 million to ₹84,508.35 million over the same two years (RHP p.75).
• ₹1,500.00 million was raised in FY26 from the issue of shares to non-controlling interests in subsidiaries (RHP p.77).
• There has been no change in the statutory auditors in the three preceding years; Singhi & Co are the auditors (RHP p.86).

13Capacity and expansion

Source: RHP p.188, RHP p.189; the total includes estimated developable area for upcoming projects. Greenfield land is 83,566,500.85 square feet of that, 94.56% (RHP p.188). Developed and under development is 31.96 million square feet (RHP p.188). Deliveries were 2.23, 1.33 and 1.17 million square feet in FY24, FY25 and FY26 and launches 1.89, 1.10 and 2.06 million square feet (RHP p.120). The issue funds no construction directly; ₹3,250.00 million repays debt and the balance is for acquiring future projects (RHP p.105).

14Market size and industry structure

As claimed: the company states it was first in launches and second in sales of residential units in Kalyan and Dombivli between January 2023 and March 31, 2026, with about 11.41% and 6.33% shares, citing the JLL report titled "Overview of India's Real Estate Market" dated September 11, 2026, commissioned and paid for by the company (RHP p.188, RHP p.6). The same commissioned report describes Mumbai's market as highly competitive, with limited land availability in South and North Mumbai and most new launches in North Mumbai coming through redevelopment (RHP p.61).

The part that is addressable: residential and commercial development within Mumbai, where all ongoing and upcoming projects are located (RHP p.407).

What the company is today: 88.37 million square feet of portfolio, ₹23,535.05 million of Fiscal 2026 sales value and 2,182 units sold (RHP p.189, RHP p.120). The prospectus does not state the company's share of the Mumbai market as a whole, only of Kalyan and Dombivli.

15Competitive position

Source: RHP p.119. Two further peers are named: Keystone Realtors, ₹26,345.00 million of revenue, and Prestige Estates Projects, ₹1,26,854.00 million, along with Kalpataru at ₹34,356.20 million (RHP p.119). What the company sells on is the Runwal name in the eastern suburbs, a pipeline it says gives visibility of cash flow, township development including schools and malls, and the ability to keep selling through the construction phase at a premium (RHP p.117).

16Peers the company named

Peers named in the offer document: Oberoi Realty, Lodha Developers, Godrej Properties, Sunteck Realty, Keystone Realtors, Prestige Estates Projects and Kalpataru (RHP p.119).

Source: RHP p.119; P/E at NSE closing prices of September 18, 2026 (RHP p.118). The prospectus states the highest, lowest and average of the set as 57.66, 21.09 and 39.18 (RHP p.118). Lodha and Prestige are about nine and seven times the company's revenue, and only Sunteck is smaller; on return on net worth the company reports 27.24% against 1.94% to 14.73% for the seven peers (our arithmetic, RHP p.119).

17Valuation at the issue price

At the upper band of ₹302, the ₹5,000.00 million fresh issue is about 16,556,291 new shares, added to 131,391,436 existing shares (our arithmetic, RHP p.72, RHP p.104):

Source: RHP p.76, RHP p.118, RHP p.120; the arithmetic is ours. At the lower band of ₹290 the market capitalisation is ₹43,103.52 million (our arithmetic, RHP p.72). Enterprise value, with the net debt of ₹27,781.10 million the prospectus states, is ₹72,461.31 million (our arithmetic, RHP p.120); ₹3,250.00 million of that debt is to be repaid from the issue (RHP p.105).

The seven peers the prospectus names traded between 21.09 and 57.66 times earnings on September 18, 2026, a median of 33.42 times and an average the prospectus puts at 39.18 (RHP p.119, RHP p.118). At the upper band the issue is priced at 24.1 times FY26 profit on the enlarged share count, 28% below that median, and 18.0 times on the prospectus's own diluted earnings per share (our arithmetic, RHP p.119).

18Risks, in plain words

Debt: net debt was ₹27,781.10 million at March 2026 against total equity of ₹8,448.16 million, a ratio of 3.29 (RHP p.120) → interest of ₹2,729.00 million was paid in cash in FY26, more than the year's profit (RHP p.77) → ₹3,250.00 million of the issue repays borrowings (RHP p.105).

Cash from operations: operating cash flow was −₹5,494.82 million, −₹1,981.36 million and −₹1,807.13 million in the three years (RHP p.77) → the business is funded by customer advances and borrowings while inventory builds → inventory reached ₹84,508.35 million at March 2026 (RHP p.75).

One city: all ongoing and upcoming projects are in Mumbai (RHP p.407) → a change in Mumbai's prices, approvals or redevelopment rules moves the whole company → the only market-share claim the prospectus makes is for Kalyan and Dombivli (RHP p.188).

Revenue is lumpy: revenue fell from ₹24,088.65 million in FY24 to ₹10,077.66 million in FY25 and rose to ₹17,989.49 million in FY26 (RHP p.76) → reported results depend on when projects are handed over, not on how much is sold → deliveries were 2.23, 1.33 and 1.17 million square feet (RHP p.120).

Cancellations and refunds: 170 agreements were cancelled after registration in FY26, for ₹923.07 million, against 92 for ₹596.52 million in FY24 (RHP p.57) → a delay in delivery obliges the company to refund the buyer → cash for refunds competes with construction spending.

Guarantees and litigation: corporate guarantees of ₹18,400.00 million have been given for loans to group entities, and tax matters of ₹6,292.78 million are in dispute (RHP p.78) → an invocation or an adverse tax order would take cash → 85 tax proceedings and 61 real estate matters are pending against the subsidiaries (RHP p.50).

Pledged shares: the promoter has pledged shares and given a non-disposal undertaking over others as security for a company loan (RHP p.98) → invocation would change who controls the company → pledges over subsidiary shares could mean those entities cease to be subsidiaries (RHP p.43).

19Litigation and regulatory matters

Source: RHP p.50. These are amounts claimed or demanded, to the extent ascertainable, not amounts payable. Against the company are two criminal proceedings, 20 tax proceedings, six material civil matters and six real estate matters; against the subsidiaries, two criminal, 85 tax, five civil and 61 real estate matters (RHP p.50). No disciplinary action has been taken by SEBI or the stock exchanges against the promoter in the last five years (RHP p.50).

20Related-party transactions

Source: RHP p.79. The company borrows from and lends to group companies through inter-corporate deposits: it paid ₹133.34 million of interest on such deposits in FY26 and received ₹40.59 million (our arithmetic, RHP p.79). S.R. Constructions, an associate, is paid a management fee and has returned security deposits of ₹570.00 million over two years (RHP p.79).

21What the offer document does not say

Revenue, margin or unsold inventory by project is not disclosed in the pages read, so the ₹84,508.35 million of inventory cannot be attributed to particular developments. The land cost and the realisation per square foot for individual projects are not disclosed. The company's share of the Mumbai market as a whole is not stated, only of Kalyan and Dombivli. The amount for future project acquisitions and general corporate purposes and the issue expenses are left blank. How much interest is capitalised into inventory each year is not stated separately in the summary financial information.

22Five questions for management

1. How much interest was capitalised into inventory in each of FY24, FY25 and FY26, and what is the total carried in the ₹84,508.35 million of inventory at March 2026?
2. Of the 28 ongoing projects, how much of the developable area is unsold, and what is the expected handover schedule?
3. Why did the number of cancellations rise from 92 in FY24 to 170 in FY26?
4. Which borrowings will the ₹3,250.00 million repay, at what interest rates, and what will net debt be afterwards?
5. What are the terms of the ₹18,400.00 million of corporate guarantees given for group entities, and what is outstanding under each of those loans?

1Sources and cited facts

This study was read from 1 document the company filed. The 100 figures it cites are listed under the document each came from, with the page and the sentence as printed.