DLF plans to launch QIP in June to raise upto Rs4,500 crore
DLF is looking to raise Rs4,000-4,500 crore via QIP, which will be used to repay loan and become debt-free by March 2019
New Delhi: India’s largest realty firm DLF plans to launch QIP in June for raising Rs4,000-4,500 crore through sale of shares to institutional investors as part of its objective to become debt free company. The company plans to issue up to 17.3 crore shares through qualified institutional placement (QIP).
According to officials, the company is planning to launch QIP in June and is looking to raise Rs4,000-4,500 crore, which will be used to repay its loan and become debt-free by March 2019. The company spokesperson declined to comment on the issue.
In February this year, DLF had said that its net debt has come down to Rs5,513 crore from around Rs27,000 crore after it repaid some bank loans and transferred a substantial chunk to its joint venture with Singapore’s sovereign wealth fund GIC.
According to an investor presentation, DLF had a net debt of Rs5,513 crore. The net debt of its JV firm DLF Cyber City Developers Ltd (DCCDL) stood at Rs16,074 crore. The debt from its commercial real estate business has been reflected in the books of DCCDL, which holds the bulk of rent-yielding commercial assets.
In a conference call with analysts, DLF’s group CFO Saurabh Chawla had expressed confidence that company would be debt free by March 2019 with the help of proceeds from proposed QIP, further infusion of funds by promoters and internal accruals.
In August last year, DLF promoters sold entire 40% stake in DCCDL for Rs11,900 crore. This deal included sale of 33.34% stake in DCCDL to GIC for Rs8,900 crore and buy-back of remaining shares worth Rs3,000 crore by DCCDL. The deal concluded in late December.
As a result, DLF stake in DCCDL increased to 66.66% stake from 60%, while GIC has the balance 33.34% stake in the joint venture firm. Post this transaction, DLF promoters K.P. Singh and family have infused Rs9,000 crore in the company and would pump in Rs2,250 crore more over the next 18 months.
DLF has made preferential allotment of compulsorily convertible debentures (CCDs) and warrants to the promoters against infusion of funds.
As infusion of funds by promoters will lead to increase in their shareholdings beyond permissible limit of 75%, the company plans to launch QIP and maintain minimum public shareholding norm of 25%.
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