Unitech raises fund from overseas PE

Money!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.