DLF Launches QIP To Raise Rs 3,000 Cr
Realty major DLF launched its qualitative institutional placement (QIP) on March 25 to raise an estimated Rs 3,000 crore through the sale of equity shares. The floor price has been fixed at Rs 193.01 per equity share. The proceeds of the sale would help the company in reducing debt that stood around Rs 7,200 crore as on December 31, 2018.
The developer is also bringing ready to move housing inventories worth Rs 12,500 crore which is being targeted to be sold in the next three to five years.
In 2018, after the announcement of its plan to launch convertibles to generate funds, DLF had successfully managed to raise its profit from Rs 110 crore in Apr-Jun 2017 to Rs 172 crore in the corresponding period of FY 2018-19, a rise of 56 per cent. However, the net profit of the company had declined to Rs 1,657 crore during the first quarter of FY 2018-19 from Rs 2,211.24 crore in the corresponding period of 2017. DLF had also announced that it will sell apartments only when it gets an occupancy certificate after completing the project so as to remove any uncertainty regarding costs and delivery timelines.
DLF is currently planning to develop 2.5 million square foot (sqf) of commercial office as part of its special economic zone in Hyderabad whereas in Chennai, a one million sqf office space will be constructed in a special economic zone.
What is QIP?
QIP is a way for listed companies to raise money, without having to submit legal paperwork to market regulators by issuing shares or convertible securities to a select group of person. The SEBI has formed the guidelines for this financing avenue in 2006 in order to keep the Indian market from over depending on foreign capital. Also, only qualified institutional buyers are eligible to purchase such equities.
DLF is one of the largest commercial real estate developers in India, and has 25 million square foot (sqft) of leased office space in top Indian cities. It generates a rental of about Rs 1,950 crore annually.
Recently, DLF promoters K P Singh and family have infused Rs 9,000 crore in the company and would pump in Rs 2,250 crore more.
It was in 2017 when promoters of DLF sold their 33.34 per cent stake in its rental arm, DLF Cyber City Developers Ltd (DCCDL), to Singapore sovereign wealth fund GIC for Rs 8,956 crore.
Apart from this, DLF also develops residential as well as shopping malls in India. The company has a seven million sqft residential project in central Delhi, an 11.76-acre plot in Gurgaon and a 5.56-acre land parcel in the southern city of Chennai. This land bank will be used to develop commercial properties.