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Saturday, April 22, 2006

DLF plans to raise Rs 10500cr through IPO

KP Singh-promoted DLF group on Thursday announced that it plans to raise around Rs 10,500 crore (Rs 105 billion), India’s largest, from its initial public offer, IPO, in June, by diluting around 10% stake in the company, reports The Economic Times.

After its EGM, the company announced that it will issue 20 crore new shares with a face value of Rs 2 each.

In addition, it will issue 35 lakh new shares to employees for stock option programme while around 3.5 crore shares are being allocated for placement to Indian and foreign institutional investors, pre-IPO. The authorised share capital of the company will be increased from Rs 40 crore (Rs 400 million) to Rs 500 crore (Rs 5 billion).

The company would issue 7 bonus shares against each held by the existing shareholders, split stocks of face value of Rs 10 into Rs 2. Following the IPO, the promoter’s stake in the company currently pegged at 99.5%, will come down to around 87%, Ramesh Sanka, chief financial officer, DLF said.

The flagship company has now been renamed as DLF from its earlier avatar of DLF Universal. All the group companies have now been consolidated under the new entity. As per unaudited results, the group earned profit before tax of Rs 700 crore (Rs 7 billion) on a turnover of Rs 2,000 crore (Rs 20 billion) during 2005-06.

It plans to use a major portion of the proceedings from the IPO to fund its SEZ projects and integrated townships, while part finance its foray into the hospitality sector. Sanka said the group will continue to focus on its core business of real estate while tie-up with international hotel chains for its four-star and budget hotel properties.

As part of its expansion programme, the group plans to increase its presence to 35 cities over the next two years, from 18 at present. Global advisors to the issue are DSP Merrill Lynch, Kotak Mahindra, while the lead managers are UBS, JM Morgan Stanley, Enam Securities, ICICI-Securities and Citi Bank.

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