Unitech raised 575 million dollars by placing shares with overseas private equity funds at Rs 81 a unit. This clearly indicates the rising interest of foreign investors in the Indian real estate market.
The company planned to raise only 200 million dollars, but as demand was huge, it decided to increase the issue size. The total demand in auction was for over 1 billion dollars. In the deal, the company will issue 342 million shares, which will expand its equity base by around 16.7%. This will bring down the promoter’s stake in the company to around 43%. However, following the conversion of warrants , subscribed by the promoter in May at Rs 50 per share for Rs 1,155 crore, this stake will increase to 49%. The money raised will be partly used to repay high cost debt of and partly to launch affordable houses in various regions of the country. The company had announced its plans to build 20,000 affordable houses at an investment of Rs 1,700 crore. It also aims to sell 15,000 flats in 2009-10. It is converting some of its premium projects into affordable housing.
Real estate major Sobha Developers is in talks with private equity players such as JP Morgan, Actis and IL&FS for selling stakes in some of its projects to raise much-needed fund for the development. Sobha is also planning a qualified institutional placement to reduce debt burden by almost eight hundred crore rupees this fiscal. The capital raised through QIP is used for paying off its debt while roping in financial investors at special purpose vehicle level is about kick-starting certain projects with near-term development horizon.
Sobha Developers carries a debt of Rs 1,850 crore. Sobha is looking to earn up to Rs 1,500 crore via the QIP route in the coming weeks. The exact quantum of the mop-up would be announced soon.
The developer has been looking at a three-pronged approach in its capital raising plans. First one is QIP at entity level, second is SPV deals and last one is divesting some of its land bank assets.
Government is considering giving ‘maharatna’ status to big PSUs to provide them greater freedom to take strategic decisions in key areas of investment and mergers and acquisitions.
The plan to create the ‘maharatna’ group among the so-called ‘navaratna’ companies is part of the 100-day agenda of the ministry of heavy industries and public enterprise.
Currently 18 ‘navratna’ companies have financial autonomy to invest up to one thousand crore rupees in setting up joint ventures or subsidiaries abroad and freedom to decide on merger and acquisitions without the government permission.
