Northgate Realty Ltd.
The land bank is the story, and the land bank is not where the cash comes from.
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The issue
- Price band
- ₹186 – ₹196
- Lot size
- 76 shares
- Minimum
- ₹14,896
- Opens
- 14 Oct 2026
- Closes
- 17 Oct 2026
- Listing
- 22 Oct 2026 (tentative)
- Total size
- ₹950 crore
- Fresh issue
- ₹950 crore
- Offer for sale
- None
- Type
- Book built · Mainboard
What the business does
A regional residential developer with 26 ongoing projects, concentrated in two cities. The prospectus leads with a land bank valued on a development-potential basis rather than at cost.
Roughly 71% of the pipeline is in the affordable and mid-income segment, where realisations are lowest and approval timelines are longest.
Three years of numbers
| ₹ crore unless stated | FY24 | FY25 | FY26 |
|---|---|---|---|
| Revenue (₹ cr) | 1,104 | 984 | 1,268 |
| EBITDA (₹ cr) | 214 | 151 | 238 |
| EBITDA margin % | 19.4 | 15.3 | 18.8 |
| Net profit (₹ cr) | 61 | 18 | 74 |
| Cash from operations (₹ cr) | -122 | -208 | -164 |
| Net debt / EBITDA | 4.1 | 6.3 | 4.8 |
What the fresh money is for
- ₹610 croreRepayment of borrowings
- ₹200 croreLand acquisition
- ₹140 croreGeneral corporate purposes
What you are paying
25x FY26 earnings, or 0.9x the stated net asset value
| Comparison | Multiple | Margin |
|---|---|---|
| Listed peer A | 21x | positive operating cash flow |
| Listed peer B | 28x | positive operating cash flow |
| Northgate at ₹196 | 25x | negative operating cash flow, 3 years running |
A mid-range multiple against peers that convert profit into cash. This one has not, in any of the three years shown.
What could go wrong
- Operating cash flow has been negative for three consecutive years. Profit is being reported while cash leaves the business.
- Net debt is 4.8x EBITDA after a year in which it improved. ₹610 crore of the raise repays borrowings, which does not add capacity.
- The land-bank valuation rests on development potential, not cost or a transaction. It is an assumption presented as an asset.
- Two-city concentration means one local approval cycle or one policy change moves the whole book.
Our view
Three years of negative operating cash flow against reported profits is the whole note. A developer that cannot convert sales into cash is funding itself from the balance sheet, and this issue largely repays that borrowing rather than expanding anything.
The multiple is not extreme, but it is being asked for a business with weaker cash conversion than the peers it is priced against. Avoid at the band. If the cash flow turns positive for two consecutive halves, it becomes a different conversation.
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