Major realty firms, including Emaar MGF and Sahara, on Tuesday approached the Securities and Exchange Board of India (SEBI) for public offerings to raise collectively over Rs. 11,000 crore, reflecting that sector has emerged from the worst of the global financial crisis.
Emaar MGF, which was forced to dump its issue last year in the face of economic downturn and stock market crash, filed the draft prospectus before SEBI to raise up to Rs. 3,850 crore.
The company planned to raise over Rs. 7,000 crore last year through an initial public offer, but withdrew it due to poor market response, even after revising the price band downward after the offer.
Mumbai-based premium housing player Lodha Developers filed the draft prospectus to raise about Rs. 2,500 crore through an initial public offer.
According to industry sources, Lodha Developers will use the fund for expansion and partly retire debts and is looking at the listing during the first quarter next year. The company has filed the draft red herring prospectus with SEBI, they added.
The sources said the company, which has annual revenues of around Rs. 1,000 crore, would utilise about 20 per cent of the funds raised for retiring debt and the balance for expansion and developing various projects.
Lodha Developers is working on about 40 projects, of which bulk are residential properties and has a land bank of 200 million sq. ft. The company is also working on some commercial projects.
Sources said Lodha, which has a debt of around Rs. 1,000 crore, is looking at utilising the funds raised through the initial public offer over a period of 12-18 months.
Likewise, Sahara Prime City has also filed its draft red herring prospectus for a Rs. 3,450-crore public issue, while Delhi-based Ambience has undertaken a similar step to raise up to Rs. 1,293 crore.
Sahara Prime City would utilise the fund raised from the IPO to develop townships in 99 cities, a source said.
Sahara Prime City will be the third Sahara group entity to enter the capital market after Sahara Housingfina Corp and Sahara One Media & Entertainment and is present in over 200 cities with its housing and commercial projects.
However, the group’s ambitious Ambey Valley project is not part of Sahara Prime City. The realtors’ move to tap the capital market comes in the wake of improving sentiment that has seen the Sensex cross the 16800-mark this month from just 8000 in March this year.
Industry experts said it was the right time to tap the capital market to raise funds as housing demands had started to revive in the recent past.
Delhi Special Correspondent writes:
Ambience plans to raise up to Rs. 1,293 crore through IPO, diluting up to 15 per cent stake aimed at repaying debts and carry out construction works.
“We are planning to raise about Rs. 1,300 crore. The stake dilution will depend on SEBI clearances, but it will be between 10 and 15 per cent,” Ambience group Chairman Raj Singh Gehlot said in a statement issued here. The company has also filed the draft red herring prospectus with SEBI.
About Rs. 475 crore will go into repayment of the company’s high-interest debt, while another Rs. 470 crore will be used in completing the construction of existing as well as new projects.
The company has a debt of Rs. 2,500 crore in its books. A further Rs. 150 crore would be pumped in for paying external development charges (EDC) for some projects awarded by the Haryana Government.
The issue would be a 100 per cent book building process with equity shares of Rs. 10 each.