Bangalore: Realtor Brigade Enterprises Ltd expects to commence share sales to institutions by early next year, while it is in talks with 2-3 private equity players for stake sales in projects, its chief said on Wednesday.
“The board will have to take a final call on when it is an opportune time to come with a QIP (qualified institutional placement). The call will be taken hopefully by the end of the year,” chairman and managing director M.R. Jaishankar told Reuters on a the sidelines of a media briefing.
Subject to good market conditions, the QIP should happen in Jan-March, he said.
Bangalore-based Brigade had received shareholder approval to raise up to Rs750 crore through an equity sale. “We will need it in 2011, primarily for new projects, new land banks.”
Separately, the company is in talks with 2-3 private equity players for a proposed stake sale in its two projects and expects to raise $100-$200 million.
The company expects to sign at least one deal in two months, Jaishankar told reporters on the sidelines of a media briefing.
“If everything happens well, in two months time it should happen,” he said, adding, it is in discussions for selling stake in World Trade Center and an upcoming retail mall, both in Bangalore.
If Brigade manages to rope in PE firms it would look at reducing the QIP size by 30-40%, Jaishankar said.
The company is also planning projects totalling 10-12 million square feet in FY11 across south Indian cities. At present, it has a constructed area of 20 million square feet, he said.
The company’s current debt is more than 6 billion rupees, with a debt to equity ratio of 0.65.
Jaishankar expects realty prices to increase by upto 10% till December, based on inflation and rising construction costs. “The market is reviving, it is again good time for real estate. The interest is coming in from pent-up demand and the feeling that the prices are reasonable and interest rates are fairly realistic.” Shares of the company closed up 2.98 percent at Rs146.90 a share in a weak Mumbai market.