Can Runwal Enterprises IPO deliver long-term growth for high-risk investors?

ET Intelligence Group: Runwal Enterprises, a real estate developer, plans to raise ₹500 crore through a fresh issue towards debt repayment. The promoter group's stake will fall to 84.6% after the IPO from 95.2%. The company has greenfield projects requiring land acquisition, as well as flexible models and asset light models through joint development agreements. Residential projects contributed nearly 94% to sales value in FY26. Nearly two-thirds of the company's developable area is in Mumbai, signalling geographic concentration. More than 60% of the portfolio comprises upcoming projects, providing revenue visibility. The IPO is priced at the lower end of the peer valuation range. Given these factors, investors with a high-risk appetite may consider the IPO with a long-term view.

Business

Incorporated in 2016, Runwal Enterprises is a real estate developer with a presence in residential projects across the affordable, mid-income, and luxury segments, along with commercial spaces, retail malls, and educational buildings. As of March 2026, it has 19 completed projects, 28 ongoing projects and 33 upcoming projects. The realtor has a portfolio of 88.4 million square feet (msf) of developable area, which includes 56.4 msf of upcoming projects and 19.9 msf of ongoing projects and 12.1 msf of completed projects.

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Financials

Revenue from operations increased to ₹1,798.9 crore in FY26 from ₹1,007.8 crore in FY25 though it remained below the ₹2,408.9 crore recorded in FY24. Similarly, net profit surged to ₹185.8 crore in FY26, compared with ₹55.6 crore in FY25 and ₹93.7 crore in FY24. Operating margin before depreciation and amortization (Ebitda margin) improved to 19.4% in FY26 from 8.4% in FY24. Net debt increased to ₹2,778.1 crore from ₹1,631.2 crore while net debt to Ebitda declined marginally to 7.9 from 8.1 in FY26 over FY24. Average sale price was ₹11,366 per square feet in FY26 as against ₹11,754 per square feet in FY25 from ₹9,230 per square feet in FY24.

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Valuation

Considering the post-IPO equity and FY26 net profit, the company demands price-earnings (P/E) multiple of 24 compared with 21-73 for peers including Sunteck Realty, Keystone Realtors, Sri Lotus Developers and Realty and Kalpataru. The company's price-sales multiple works out to be 2.5 compared with 1.7-13.9 for peers.