Emaar MGF is proposing to aggregate between Rs 5540 to Rs 6464 crore through an IPO, which would amount to a post-issue stake of 10.2 per cent in the company. The price band for the issue is fixed at Rs 540-630 a share. Earlier, the issue price was fixed at Rs 610-690 a share amounting to a market cap of Rs 69,382 crore. Owing to volatility in the markets the issue price has been revised downwards. Even then, this will make Emaar MGF the second largest real estate developer by market capitalization after DLF, which has a market capitalisation of about Rs 1,39,000 crore.
Mr. Shravan Gupta, Executive vice chairman and managing director, Emaar MGF Land, said “The increase in Emaar MGF’s equity base will help it leverage better, since even now, the debt-equity ratio is as low as 0.86”.
Emaar MGF plans to utilise Rs 2,560.50 crore from the issue to make part payment for its land, Rs 775.50 crore toward development and construction costs of its Palm Drive project in Gurgaon, and the rest for repayment of loans.
Besides, the company has projects under development, including the 2,700 acre-plus integrated township in Mohali, a residential township in Hyderabad, Delhi, Chennai and high-end residential and commercial developments in Gurgaon. “Out of the proposed reserves, Emaar MGF has already paid up for almost 90 per cent of the land,” mentions Gupta, hinting at the robustness of the developer.
