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Saturday, September 02, 2006

DLF withdraws IPO prospectus; eyes re-filing in Nov

The much-hyped public issue of real estate major DLF Ltd faced yet another roadblock on Thursday with the company withdrawing its initial public offer prospectus with the market regulator SEBI.

DLF today said it has withdrawn the draft red herring prospectus for its planned IPO as the financial information furnished in the document had become outdated.

The IPO was being touted as the country`s biggest ever public issue with total proceeds from the sale of shares in the offer being pegged at as high as over Rs 15,000 crore in the market circles.

A company spokesperson said that the financial details in the prospectus needed to be updated due to the lapse of about four months since the filing.

She added that the company was likely to submit a new DRHP by November.

DLF expects to get a valuation much higher that what was stated in the previous prospectus, she added.

The company had filed the DRHP with Securities and Exchange Board of India on May 12 for its IPO.

"The kind of business we have done in the last four months has been significant," she said, adding that investors had a right to know the latest information about the company.

Given the lapse of four months since the filing and the company`s business expansion in this period, the company on advice of its bankers, has decided to update the DRHP with new financials and business developments, DLF said in a statement.

According to the prospectus, DLF had offered 20.2 crore equity shares of Rs two each for cash at a premium to be decided through the 100 per cent book building process.

According to the previous DRHP, the proposed issue constituted about 12.77 per cent of the fully diluted post-issue capital of the company.

However, after filing the prospectus, the company got embroiled in a controversy related to its minority shareholders, which is said to have delayed the IPO considerably.

The minority shareholders filed a complaint with the market regulator SEBI alleging that they did not receive the letter of offer of the debenture that the company issued in December last year.

However, the company has been consistently denying the allegations, saying that "SEBI has been kept fully and entirely informed of all the issues pertaining to the disaffected minority shareholders."

According to sources, DLF`s land bank has been valued at Rs 90,000 crore by Cushman and Wakefield, global realty consultants.

The company plans to use the IPO proceeds for acquisition of land and other investments.

The company is also looking at equity participation in hotel business for its foray into the hospitality sector.

The company has already issued 7 bonus shares against each held by the existing shareholders and split stocks of face value of Rs 10 into Rs 2 and placed 3.5 crore shares with foreign institutional investors or domestic institutional investors.

The company`s shareholders had approved these decisions at an extraordinary general body meeting (EGM) held on April 20.

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