Mumbai: Hindustan Construction (HCC) said on Friday it has received an “observation letter” from market regulator Securities & Exchange Board of India (Sebi) for its unit Lavasa Corp’s proposed Rs2,000 crore initial public offering (IPO).
“The observation letter is an approval from Sebi,” group chief financial officer Praveen Sood told Reuters, adding the market regulator has given the company permission to file the Red Herring Prospectus or the final papers for the IPO.
The company has to open the issue within 12 months from the receipt of the observation letter, he said.
The market regulator had made certain observations, which has to be rectified at the time of the filing RHP, Sood said, but did not provide the details.
On 14 September, Lavasa Corp, in which HCC holds a 65% stake, had filed a draft prospectus for an IPO, joining a crowded pipeline of property firms looking to tap the equity market to fund growth.
Nearly two dozen developers have announced plans for IPOs to raise a total of $6 billion since last year, although many of are on hold as companies hope valuations to improve.
Lavasa, which is developing several hill townships near Pune in Maharashtra, would use the IPO proceeds to develop infrastructure at the site, repay some debt and to buy additional land in Lavasa.
At 11.58 am, HCC shares were trading up 3.09% at Rs60.10 on the Bombay Stock Exchange.