DLF Ltd, India’s largest real estate developer, will raise around Rs8,250 crore and Rs3,000 crore, respectively, through an issuance of compulsorily convertible unsecured debentures (CCDs) and warrants to promoters, the company said after a board meeting on Friday.
“Once the issuances and conversion into equity shares is completed, the total additional amount of promoter group equity contribution to DLF will be around Rs11,250 crore,” the realty firm informed BSE.
Once this is done, DLF will raise a further Rs3,500 crore, in one or more tranches, by way of a public issue, a private placement or a qualified institutional placement (QIP).
A QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures and any securities other than warrants that are convertible into stocks to a qualified institutional buyer.
The entire funds will be primarily used to reduce DLF’s debt, which rose by another Rs900 crore to Rs26,799 crore as of 30 September.
In August, DLF’s promoters sold their 40% stake in the rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs11,900 crore, which includes the sale of 33.34% stake in DCCDL to Singapore’s sovereign wealth fund GIC Pte Ltd for Rs8,900 crore and buyback of remaining shares for Rs3,000 crore by DCCDL.
Infusion of capital by promoters will lead to an increase in promoters’ stake in DLF to more than 75% and a QIP will help to maintain the minimum public shareholding limit of 25%.
The rental assets arm of DLF has 26.9 million sq. ft of leased-out space and an under-development pipeline of about 2.5 million sq. ft, with further development potential of about 19 million sq. ft within its portfolio.
DLF also said that Ashok Kumar Tyagi, group chief financial officer, and Devinder Singh, managing director of DLF Home Developers Ltd, have been appointed whole-time directors of the company with effect from 1 December.
On Friday, DLF’s shares fell 2.87% to close at Rs226.40 on BSE, while the benchmark Sensex dropped 0.95% to close at 32,832.94 points and the exchange’s realty index declined 1.99% to close at 2,397.03 points.