Omaxe to raise Rs605 cr, IPO opens 17 July

Omaxe to raise Rs605 cr, IPO opens 17 July
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First Published: Fri, Jul 13 2007. 06 56 PM IST
Updated: Fri, Jul 13 2007. 06 56 PM IST
PTI
New Delhi: Real estate firm Omaxe plans to raise up to Rs605 crore from the capital market through its initial public offer, which opens on 17 July, for acquisition of land, repayment of loan and to meet the construction cost.
The company proposes to issue about 17.8 million equity shares of Rs10 each through 100% book building process at a price band of Rs265-310 per share.
“We have a land bank of 3,255 acres and are developing 52 projects, which include group housing, integrated townships, shopping malls, commercial complexes and hotel,” Omaxe chairman and managing director Rohtas Goel told reporters here.
When asked why Omaxe has fixed the price band lower when the property consultant Trammel Crow has given the company a valuation of over Rs13,000 crore, Goel said: “I am making a long-term relationship with investors. This shows how much I am leaving for the investors on the table.”
The company had plans to raise up to Rs1,400 crore from the IPO, but later decided against it due to slowdown in the real estate sector.
“Based on the advice of merchant bankers, the company has lowered its valuation due to high interest rates and softening of real estate price,” banking sources said.
The company, which has a presence in 30 cities and nine states, intends to use Rs325 crore for payments related to land, Rs200 crore for repayment of loan and Rs150 crore to meet construction cost from the issue proceeds.
Of the total issue, 17.5 million shares are for the public, while 296,000 shares are reserved for employees. There would be a green shoe option of 1.75 million shares.
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First Published: Fri, Jul 13 2007. 06 56 PM IST
More Topics: Omaxe | IPO | Money Matters | IPOs |