Jan 4, 2007

DLF offers fewer shares in Rs 13,500 crore IPO

Land holdings more than double in fresh prospectus.

Months after charges of discrimination against minority shareholders forced DLF Ltd to postpone its plan for India’s largest initial public offering, the realty major today filed a fresh draft to raise around Rs 13,500 crore, more or less what it planned to raise last May.

Though it has reduced the issue size, DLF’s valuation has gone up on account of a substantially larger land bank and a considerable increase in net profits.

The issue size, which constituted 11.9 per cent of the fully diluted post-issue capital in the previous filing, has now been reduced to 10.27 per cent.

Against the 202 million equity shares of Rs 2 each that DLF had offered last time, the company is now offering 175 million, with a greenshoe option. The reduction in the number of shares on offer is on account of DLF promoter KP Singh (India’s fifth richest billionaire) and his family not selling any shares held by them.

Of the money to be raised, DLF intends to spend Rs 6,500 crore on land acquisition and Rs 3,493.3 crore on development and construction under existing projects. It also plans to repay at least 50 per cent of its loans from the issue proceeds.

The company has identified and acquired land in and around 31 cities, which it thinks suitable for residential and commercial projects. For building shopping malls, DLF intends to identify and acquire land in 60 cities across India.

Against a net profit of Rs 191.7 crore in fiscal 2006, the company’s net profits for the eight months ended November 2006 stood at Rs 1,830 crore. But, the company’s debt has also doubled. From Rs 3,040.8 crore declared in the first prospectus, DLF’s debt is now pegged at Rs 6,661.1 crore.

1 comment:

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