After better-than-expected responses to initial public offering (IPO) of shares by Delhi-based Parsvnath Developers and Bangalore's Sobha Developers, more Delhi-based real estate companies are queuing up to raise funds in the vicinity of Rs 15,000 crore from the capital market in the current financial year ending March 2007.
Delhi based Omaxe Ltd, a leading realty and construction company, has decided to raise around Rs 1,500 crore from the equity market. The company filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Friday for an IPO.
DLF Universal, the nation;s biggest real estate player, is expected to file its revised DRHP with SEBI shortly in an issue stalled for long by market conditions. "We have completed the entire due diligence process and expect to file the DRHP shortly," said an investment banker mandated to manage DLF Universal's issue.
DLF Universal, which had de-listed an old issue for years before eyeing a listing again, plans to raise between Rs 11,000 and 12,000 crore, which would make its IPO the biggest in the country's history, with its valuation put between Rs 1,00,000 and Rs 1,20,000 crore. The company plans to divest a mandatory minimum 10 per cent of its enhanced equity base, investment banking sources say.
Sources in investment banking also said that Omaxe is planning to divest around 11 to 13 per cent of its enhanced paid-up capital valuing the company at more than Rs 13,000 crore.
Investment banking sources said both these IPOs are expected to be completed before February-end. In fact, February 2007 is expected to witness a rush of big-ticket IPOs, they added.
If the real estate industry continues to thrive, there are host of companies that are planning to enter the capital market. "Since most of these real estate companies have aggressively increased their land banks and made commitments to sellers, they need to raise fresh funds through the equity route to fuel the planned growth," said an analyst with Deutsche Bank on condition of anonymity.
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