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Indian real estate company Macrotech Developers Ltd’s (MACE.NS) shares opened 10% below their offering price in its stock market debut on Monday, after the initial public offering saw lukewarm subscription demand from investors.

Macrotech, formerly known as Lodha Developers, is among the major players in the Indian real estate industry. Most of its residential projects are concentrated in the country’s financial capital of Mumbai, which regularly features in the top 10 most expensive property locations in the world.

The company’s shares opened at 436 rupees apiece in pre-open trading, compared to the offering price of 486 rupees. The company’s IPO was oversubscribed only 1.36 times earlier in the month, as its weak sales and substantial debt, coupled with a resurgence of COVID-19 cases in India weighed.

“The company has substantial amount of debt and contingent liabilities and the impact of COVID-19 on the business is still uncertain,” said Saurabh Joshi, an equity research analyst at Marwari Shares and Finance Ltd.

“Moreover the company is hugely focused on Mumbai metropolitan region, which is worst affected by the pandemic, hence we advise the investors of this IPO to exit in case of any bounce back in the share price,” Joshi added.

Macrotech, which competes with companies such as DLF (DLF.NS), Godrej Properties (GODR.NS) and smaller regional players, offered 36.4 million shares in the IPO, worth 17.70 billion rupees at the upper end of the price range of 483-486 rupees per share.

The company listed its shares on Monday in its third attempt after having failed in 2009 and 2018.

Indian fundraising via IPOs is at a 13-year high as a flood of foreign money and unprecedented interest from mom-and-pop investors spur more listings, making India one of the hottest IPO markets in 2021.

Macrotech’s shares pared some losses by afternoon trading, and were down 2.9%. .NSEI

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