Realty major DLF has filed an offer document with SEBI for issue of up to 8.10 crore equity shares, worth Rs. 1,940 crore, to the institutional investors to meet the market regulator’s norm on minimum public shareholding.
As per the red herring prospectus (RHP), the country’s largest real estate firm will issue up to 8,10,18,417 equity shares of face value of Rs. 2 each through the Institutional Placement Programme (IPP). The issue is only for the eligible qualified institutional buyers.
It has appointed 8 bankers for the issue - Standard Chartered Securities (India), Deutsche Equities India, DSP Merrill Lynch, J. P. Morgan India, CLSA India, HSBC Securities and Capital Markets (India), Kotak Mahindra Capital Company, UBS Securities India.
Last month, DLF’s shareholders approved the sale of fresh equity shares to meet market regulator Sebi’s norms of 25 per cent minimum public shareholding in a listed firm. Promoters have 78.58 per cent stake in the company.
DLF said that it intends to use the net proceeds of the issue for reducing debt and working capital requirement among other purposes. The net debt stood at Rs. 21,350 crore at the end of the 2012 calendar year.
Share price of the company rose by 2.81 per cent to Rs 239.35 on the BSE. The company’s market capitalisation stands at Rs. 40,658 crore.
DLF has a land bank of 6,175 acre, with an aggregate estimated development potential of about 332.4 million sq ft.
The company has been selling its non-core businesses since last couple of years to focus on core business and cut huge debt.
It is targeting to pare net debt by half over the next three years to Rs. 10,000-11,000 crore with the help of fresh issue of equity shares, sale of non-core assets and improved cash flows.
On the front of sale of non-core businesses, DLF has been able to divest its three major assets - land parcel in Mumbai, hospitality chain Aman Resorts and wind energy.
Last month, it had sold wind turbine projects in Tamil Nadu and Rajasthan for Rs. 241 crore to two separate entities. Before that the company had sold 150 MW wind mill in Gujarat to Bharat Light and Power for Rs. 282.30 crore in January 2012.
Now, the company is left with only Karnataka’s wind mill with 11 MW capacity.
In August last year, DLF sold a 17-acre land in Mumbai to Lodha Developers for Rs. 2,727 crore, while in December 2012, it announced sale of Aman Resorts back to founder Adrian Zecha for about Rs. 1,650 crore.