Silver Lining
WITH an upswing in the Indian equity market, the tide seems to be turning particularly for real estate developers. Realty stocks have recovered 50-60% from their 52-week lows. Recently, realty majors Unitech, Indiabulls and DLF came out with their qualified institutional placement (QIP) issue and it received a very good response. The three companies cumulatively raised a little over Rs 8,000 crore. The success of this fund-raising activity brings hope for this cash strapped sector when demand offtake is very low.
Indiabulls Real Estate issued 14.36 crore equity shares at Rs 185 per share to raise Rs 2,656.5 crore through QIP. It is believed that Indiabulls will use the funding for its projects in Mumbai. Unitech too raised $325 million through QIP. Part of the funds would be used to repay debt. The promoter's stake afterthe QIP has come down in both the cases. DLF's promoters sold 9.9% stake in DLF for Rs 3,850 crore to its existing institutional investors. This money is raised for infusing funds in DLF's subsidiary, DLF Assets Ltd (DAL). It is believed that DAL would partly use these proceeds to buy out the investment of private equity investor D E Shaw and the rest for reducing liability.
Things could begin to improve for the sector if the markets continue to rally. This will provide a good opportunity for other builders to follow suit and raise funds for completing the under-construction projects which are stuck due to lack of funds.
Source:The Economic Times
Indiabulls Real Estate issued 14.36 crore equity shares at Rs 185 per share to raise Rs 2,656.5 crore through QIP. It is believed that Indiabulls will use the funding for its projects in Mumbai. Unitech too raised $325 million through QIP. Part of the funds would be used to repay debt. The promoter's stake afterthe QIP has come down in both the cases. DLF's promoters sold 9.9% stake in DLF for Rs 3,850 crore to its existing institutional investors. This money is raised for infusing funds in DLF's subsidiary, DLF Assets Ltd (DAL). It is believed that DAL would partly use these proceeds to buy out the investment of private equity investor D E Shaw and the rest for reducing liability.
Things could begin to improve for the sector if the markets continue to rally. This will provide a good opportunity for other builders to follow suit and raise funds for completing the under-construction projects which are stuck due to lack of funds.
Source:The Economic Times
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