New Delhi: Unitech Ltd, India’s second-largest listed developer, is seeing home sales picking up and is not under pressure for cash after raising about $550 million in the past two months, its managing director said.
The company, which raised Rs1,617 crore ($338 million) in April by selling shares to institutions, has got more than Rs1,000 crore from asset sales since the fiscal year began on 1 April, Sanjay Chandra told a news conference on Tuesday.
Unitech has sold two hotels and one office property in New Delhi, he said, to raise funds for projects and to cut debt. It also sold about 4,000 homes in the last two and half months.
“Sales are very, very healthy. The market has definitely bottomed out. The volume of sales, which are happening right now, we have never seen before, though prices are down 25-30% from (2007) peaks,” Chandra said.
In April, Unitech had said its net debt stood at Rs8,400 crore and it would have to sell stock and assets to cut debt.
Chandra said most of the debt had been rescheduled and the position was now “comfortable”.
“We are not under pressure to raise equity capital,” he said.
The developer got shareholder approval on Tuesday for selling up to 1 billion shares to investors, but Chandra said this was an enabling resolution and there was no immediate plan for a sale.
The shareholders also approved issuing 227.5 million convertible warrants to one of its founder group firms, and he said this would inject Rs1,150 crore into the company over the next 18 months, with a quarter of it coming this month.
The founding family’s holding in the company would rise to 61% on full conversion from 51%, Chandra said.
Unitech aims to build 20 million square feet of property in 2009-10, he said, adding the focus was on low-cost mass housing projects, a strategy larger rival DLF has also adopted.
A senior official at DLF said earlier this month it was seeing signs of recovery in the beaten down Indian property market and prices should start rising from a crash that followed a three-year bull-run.
Tight financing and high prices had kept away buyers of homes, offices and shops, while a global stocks slide last year forced DLF and Unitech to shelve fund raising plans from proposed listing of property trusts.
Chandra said the market was still not ready for real estate investment trusts, and he did not expect a listing happening during the current year.
Meanwhile, telecom arm Unitech Wireless, in which Norway’s Telenor is taking a 67% stake, hopes to start mobile services during the December quarter, Chandra said.
He said the company had received wireless radio spectrum, life line for mobile firms, in 21 of 22 zones in the country.
The government last week deferred decision on regulatory approval on Telenor’s investment but would again consider on Friday.
“I am hopeful that it will be approved,” Chandra said.
Shares in Unitech gained 2.1% to Rs88.90 in a Mumbai market that rose 0.6%. The stock has more than doubled this year, outperforming the broader market, after tumbling 92% in 2008.