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Orbit Corp aims to raise up to Rs400 crore

Orbit Corp aims to raise up to Rs400 crore
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First Published: Tue, Jun 02 2009. 12 40 PM IST
Updated: Tue, Jun 02 2009. 12 40 PM IST
Mumbai: Real estate firm Orbit Corp Ltd has a target to raise up to Rs400 crore as the firm sees its stock value recovering, a top official said, sending shares up as much as 5% in early trades.
“We have a target of 400 crore, but let’s see,” Pujit Aggarwal, managing director, told Reuters on Tuesday, before the market opened.
Orbit Corp said its board will meet on 3 June to consider raising funds through a qualified institutional placement (QIP).
After the board meeting, the company will have a shareholders’ meet to pass the resolution, which will take 4-6 weeks, Aggarwal said, adding “by that time, with the stocks moving, we should be reaching a fair valuation.”
“But we will not dilute at a valuation that we don’t think will be fair.”
Shares of the Mumbai-based company have risen over four times since March. At close on Monday, its market capitalisation was around Rs670 crore.
Last week, Aggarwal said the company would wait for its share price to recover before selling stake and there was no “desperation for funds”.
Since April, real estate firms reeling under a cash crunch, started queuing up to institutional investors even as investors are encouraged by a slow return of demand for homes. The benchmark index has risen 84.4% from its March trough.
So far, via share sales, Indiabulls Real Estate raised $556 million, India’s top-listed property firm DLF Ltd fetched $783 million and Unitech Ltd has raised $325 million.
“Real estate companies are looking to reduce their leverage and enter basic-margin businesses for more steady cash,” a broker, who did not wish to be named said.
Real estate company Puravankara Projects Ltd, which also intends to raise funds, plans to take on third-party construction contracts for buildings and, by the end of 2009, cash orders for roads and bridges.
Housing Development & Infrastructure Ltd plans to raise up to $600 million through a QIP while Parsvnath Developers expects to raise $100-150 million via the same route.
“Everyone has seen in the last one year no money on the debt or equity side. Nobody wants to face that problem again, whether they need the funds or not,” Shailesh Kanani, analyst at Angel Broking said.
At 12.08 pm Orbit Corp’s shares were trading up 2.96% at Rs189.70 in a weak Mumbai market. The real estate company’s shares had risen as much as 5.21% in early trades.
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First Published: Tue, Jun 02 2009. 12 40 PM IST