Emaar to sell 117 mn shares in public offer

Emaar to sell 117 mn shares in public offer

New Delhi: The joint venture company between Dubai’s largest real estate developer, Emaar Properties PJSC, and Delhi-based MGF Development Ltd, Emaar MGF Land Ltd, has filed its draft red herring prospectus with the Securities and Exchange Board of India to sell shares in an initial public offering (IPO).

The company plans to offer about 117 million equity shares of Rs10 each, according to a release. The company, however, declined to comment on how much equity they would be divesting.

But according to the bankers to the issue, the company is divesting slightly more than 10% of its equity.

Emaar’s IPO follows the public offer by DLF Ltd, India’s largest real estate developer by market value. Emaar’s offering of 117 million equity shares is less than rival DLF’s offering of 175 million shares, sold in July. However, the price band decided by Emaar will determine whether it will raise more than DLF.

DLF mopped up a little more than Rs9,000 crore, making it the largest share offer for a real estate developer in India.

The filing comes at a time when the Indian stock market has shrugged off concerns over a financial crisis in world markets over bad loans to risky home loan borrowers in the US. India’s benchmark Sensex index has hit new highs this week, touching a record 17,000 points in intra-day trade on Wednesday.

Emaar-MGF had previously said that it plans to invest $12 billion (Rs47,640 crore) over the next four-five years in residential, commercial, retail, hospitality, education, health care, information technology parks and special economic zone projects across India.

Emaar MGF also plans new schools and universities in various Indian cities in the next seven years. The first campus is expected to be completed in two-three years near New Delhi. Emaar MGF also plans to open up to 50 hospitals in the country in the next seven years.

Emaar is best known for the Burj Dubai, which will likely be the world’s tallest tower when it opens next year. The company can also claim credit for the The Dubai Mall, which is touted as the world’s largest entertainment and shopping mall.

MGF Developments is credited with developing some of the earliest malls in the Capital’s suburb of Gurgaon.

The global coordinators and book running lead managers to the issue are Enam Securities Pvt. Ltd and DSP Merrill Lynch Ltd. The book lead managers are Citigroup Global Markets India Pvt. Ltd, Kotak Mahindra Capital Co. Ltd, HSBC Securities and Capital Markets (India) Pvt. Ltd, JPMorgan India Pvt. Ltd and Goldman Sachs (India) Securities Pvt. Ltd.