Mumbai: Some real estate companies are keeping a close watch on which way the stock market swings after the general election to move ahead with their fund-raising plans.
Sobha Developers Ltd. and Housing Development and Infrastructure Ltd., or HDIL, are considering raising funds through various equity instruments, according to people familiar with the development who didn’t want to be named.
Unitech Ltd. raised $325 million through a so-called qualified institutional placement, or QIP, in April. Indiabulls Real Estate Ltd. is looking to raise $150-200 million via a QIP. Market analysts say Sobha Developers and HDIL may also take the same fund-raising route.
Sobha Developers, in an announcement to the National Stock Exchange last week, said it had received approval from its board members to raise as much as Rs750 crore as an “enabling provision.”
Sobha deferred a rights issue of Rs350 crore earlier this year. People in the company, who didn’t want to be named, said the funds raised will be utilized for construction and debt repayment. As of 31 December, the company had debt of Rs1,850 crore.
HDIL is studying the possibility of raising $500 million through a sale of securities to qualified institutional buyers, according to investment banking executives who didn’t want to be named. The company has met Enam Securities Ltd., Morgan Stanley, JPMorgan Chase and Co. and Kotak Mahindra Bank Ltd, and wants to gauge market conditions post-elections before taking a final call.
The 15th general election ends on Wednesday. The results are expected to be known by Saturday.
Unitech is considering raising an additional $300 million through channels including another QIP, people familiar with the situation said. The company, however, has denied any such intent.