Mumbai/New Delhi: Developer Ansal Properties and Infrastructure Ltd has shareholder approval to raise funds through a sale of securities from qualified institutional buyers, but has no immediate plans to use the option, vice-chairman and managing director Pranav Ansal said in an interview. Ansal said the company will likely announce a private equity deal (PE) within a month. Edited excerpts:
Both through your placement (of preferential shares to Mauritius-based investment fund Ipro) and the warrants to promoters, what is the sum total of capital raising that you are looking to do in this tranche?
With Ipro, we are raising about Rs88 crore and with the warrants to the promoters, it will be about Rs116 crore. So a total of about Rs205 crore is to be raised.
Options open: Ansal Properties and Infrastructure’s Pranav Ansal. Ramesh Pathania / Mint
Wasn’t there talk of doing a much more significant qualified institutional placement (QIP) issue? Have you scaled back the plan because the sum total which your investors were talking about was about Rs1,500 crore? Is this then just tranche 1 after which you will follow up with more capital raising, equity raising?
We have not gone into the market for the QIP yet and I won’t even say this is the first phase. But this deal (with IPRO) was under negotiation...for a while, so we closed this deal. The warrants to the promoters was something which was added on. So the QIP is still on the cards, but not in the immediate future. We had taken an enabling resolution about two months back, which is what we announced, which is for Rs1,500 crore.
The amount of money raised through the preferential issue is not a whole lot compared with the kind of expansion plans you have. How soon would you need to hit the market with that QIP, then?
This is going to tide us (over) for the near future and going forward—we haven’t formalized the exact date yet. But as we go along, you will hear that announcement pretty soon.
There have been disappointments for a couple of companies from real estate and infrastructure—they hit the QIP market, there wasn’t that much by way of (investor) appetite, so they chose to withdraw. Did anything of that nature happen with Ansal Properties when you sent out feelers?
We have just taken an enabling resolution and we did not send out any feelers.
You have got debt of about Rs1,100 crore. Are you comfortable with that level of debt or do you want to bring it down?
Our debt-equity ratio is only about 1:1 as compared with the other people in our sector. So we definitely plan to bring it down but not in the immediate future—maybe over the next year or two. Right now we are quite comfortable. There is no pressure on the debt as such.
Is there any other parallel track conversation going on or dialogue going on for rasing capital either through a private equity firm, which was being talked about earlier, or even through a separate special purpose vehicle (SPV) in which you might want to raise some capital?
When you are in the real estate business, some dialogue or (the) other is always on but nothing in the parent company—no QIP, no preferential (issue). But there are one-two PE deals, which we are discussing on the SPV level; one of them is in quite an advanced stage. So hopefully we will be breaking that very shortly to all in the next month or so.
At this point, are you sufficiently funded for your two projects in Lucknow and Dadri (Uttar Pradesh)?
We are quite sufficiently funded. In Dadri project, HDFC has taken about 8.5% equity, about one-and-a-half years back. So, currently both the projects are moving well, sales are good and they are in advanced stage of development. So, currently, we are not looking for funding for these two projects as such.
To clarify the point you made in your earlier answer—in the next 30 days or so you would take a decision on whether or not to raise money through an SPV—that’s the focus point right now?
There is a deal which is in advanced negotiations; we intend to sign it in the next 30 days.
Ansal Properties, the listed entity, will be your majority partner or owner of that special purpose vehicle?
Currently, it’s a 100% owned subsidy of Ansal Properties. We are only diluting a small percentage, so it will be about 60-70% subsidiary of Ansal Properties.
You will look to place about 25-30% in that SPV in the next one month.
We are looking at about 26% placement—that’s a deal under negotiation.
To raise roughly what kind of money?
Roughly, that should be around Rs150 crore coming to the company.