With recent qualified institutional placements (QIPs) of Unitech and Indiabulls Real Estate raking-in over Rs 4,000 crore, market watchers believe that more than a half a dozen real estate companies, including Parsvnath Developers, Omaxe and Sobha Developers, could be next in line for fund raising.
Housing Development & Infrastructure Ltd (HDIL) on Saturday sustained the fund-raising momentum in the realty space when it announced plans to raise over Rs 2,800 crore from sale of shares.
Delhi-based Parsvnath Developers is also mulling various options, including a QIP, to raise overall Rs 500-800 crore in the current quarter. According to a person involved with the plans, Parsvnath would use the funds for ongoing projects and lowering its debt obligations, that are currently pegged at Rs 1,600 crore.
When contacted, the Parsvnath Chairman, Mr Pradeep Jain, declined to comment on the company’s plans but said that the market sentiments were strong. “There is an investor appetite for real estate stocks and also valuations at the current level are attractive,” Mr Jain said.
Similarly, Omaxe is looking at fund-raising options such as QIP or a preferential placement although just how much it would look to raise, could not be ascertained. Omaxe’s total debt currently stands at Rs 1,600 crore and the company hopes to trim this to Rs 1,000 crore by the fiscal-end. Hence, in case of Omaxe too, part of the money raised could go into retiring debt and the balance into new and existing projects, a source pointed out.
An e-mail sent to the external communications agency of Sobha Developers went unanswered. Macquarie analyst Mr Unmesh Sharma said that there could be two rounds of capital raising in the realty pack. “In the first round, we will see companies raising capital to repair their balance sheet, and in second phase some companies will go for share sale to opportunistically purchase assets,” he said.
In April, Unitech’s QIP issue of Rs 1,625 crore lifted the flagging sentiments in the real estate sector; this was followed by a stake sale by DLF promoters, and a QIP issue by Indiabulls Real Estate.
According to a Unitech official, nearly 95 per cent of Unitech’s QIP issue was placed with FIIs such as HSBC, Prudential, Orient Global, Sandstone Capital and Och-ziff.
Earlier this month, promoters of DLF Ltd offloaded 9.9 per cent stake in the company to institutional investors, for Rs 3,860 crore. Capital International Fund bought the largest chunk of DLF shares, while other investors were HSBC, Fidelity and T Rowe Price. Indiabulls Real Estate too raised Rs 2,656 crore through issue of shares on institutional placement basis.
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