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National: DLF plans to raise funds by selling shares to institutional buyers

Indian real estate conglomerate DLF plans to raise around Rs. 2,100 Cr. by selling about 8.1 Cr. shares to competent institutional buyers who are also called institutional placement programme (IPP). This is anticipated to take place by April.

 

As notified by an official, “This is done to meet with the guidelines that specify 25% public shareholding. The issue is expected to be one of the largest fund raising via IPP. The company is going to take board approval in a few weeks. We have begun discussion with merchant bankers and are likely to appoint three or four bankers soon.

 

The official further added, “The pricing will be decided in April. In any case, it will be either at the prevailing market price or at a discount of 5%, as permitted under the IPP guidelines.”

 

As stated by DLF spokesperson, “ The company will abide by the Securities and Exchange Board of India (SEBI) directives with regard to the Public Float requirements within the stipulated time frame. The requisite dilution to meet the Public Float guidelines will be done through a fresh issue of equity shares and will be compliant with the requisite SEBI guidelines in that regard.”

 

Favista’s view: In the recent past, DLF also sold a prime land in Mumbai to Lodha Developers and Aman Resorts in Delhi, while it retained property rights of around six acres for the latter. These transactions were done primarily to reduce its debt. Moreover, its recent launch DLF Sky Court has done quite well. The developer also plans to reimburse its losses by launching some more new projects this year. Debt ridden DLF surely has a strategy to resort its financial problems and the strategy seems to be working. Whether the company will be able to meet its requirements, only time can tell.

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