New Delhi: Undeterred by a tepid market for public equity offering, Indiabulls Real Estate Ltd plans to raise close to $300 million (Rs1,254 crore) through a mix of private placement and an initial public offering (IPO) of a real estate investment trust in Singapore, according to a company official who did not want to be named.
India’s fourth biggest developer by market value, partly owned by Goldman Sachs Group Inc. and Merrill Lynch and Co., will sell about 262 million shares in its unit, Indiabulls Properties Investment Trust, the company said in its IPO prospectus with the Monetary Authority of Singapore (MAS), the central bank of Singapore.
MAS also supervises the banking, insurance, securities and futures industries.
Indiabulls now has six months to sell its shares.
“The management is very aggressive,” Manoj Jain, an analyst with Asit C Mehta, a brokerage firm, said. “They are saying that there is no slowdown in the Mumbai real estate market whereas the slowdown has started. But, yes, they will face the same problems that any company would in a volatile market.”
The Singapore Exchange had granted Indiabulls eligibility to list on 5 February this year. But, the company had postponed its plans because the global equity and debt markets were roiled by the credit crisis in the US. Even as Indiabulls has gone ahead with its filing, rival property developers such as India’s largest developer, DLF Ltd, and Unitech Ltd, that also had plans of raising money through a real estate investment trust (Reit) listing in Singapore, have chosen to tread carefully and delayed the planned listings.
Indiabulls Properties Investment Trust will acquire two properties in Mumbai, One Indiabulls Centre and Elphinstone Mills, both of which are being developed by the company. The total area of the properties is around 3.5 million sq. ft. While Indiabulls owns 53% stake in the trust, Farallon Capital Partners LP, a San Francisco-based hedge fund, owns the rest.
The listing of Indiabulls’ trust is likely to happen by mid-June, a company official said. He didn’t want to be named because he isn’t authorized to speak with the media. Deutsche Bank AG and Merrill Lynch (Singapore) Ltd are the bookrunners to the deal, while DBS Bank Ltd is co-ordinating the offer.