DLF subsidiary plans $3 bn overseas listing
After making India’s biggest initial public offering (IPO), real estate behemoth DLF has now planned the biggest Indian issue overseas. DLF Office Trust Ltd, a subsidiary, is set to mop up Rs 12,000 crore ($3 billion) on the Singapore Stock Exchange. In June, DLF’s IPO raised Rs 9,200 crore.
DLF Office Trust, formerly Delhi Asset Ltd, will file a draft red herring prospectus for its IPO within two weeks. It has appointed Goldman Sachs and Lehman Brothers as investment bankers for the issue.
Without disclosing its size, Ramesh Sanka, DLF’s chief financial officer, said the issue would be big and in which DLF itself would invest $750 million. DLF Office Trust will operate as a real estate investment trust, leasing out property developed by its parent. “The company looking at an annual yield of 9-10 per cent from these properties,” said a banker.
Under Singapore law, promoters’ holdings in real estate investment trusts need to be below 50 per cent. In July, DLF Office Trust raised $600 million from two leading investors, $400 million from hedge fund DE Shaw and $200 million from Lehman Brothers. Though the valuation and price of these allotments will be done after the book-built IPO, company sources said DLF Office Trust would be valued upward of Rs 20,000 crore ($5 billion).
In addition, DLF is also looking at raising $1.5 billion (Rs 6,000 crore) debt through a couple of foreign subsidiaries.
These funds would be invested in the company, which has projects abroad as well as in India, Sanka said.
In its board meeting on October 11, DLF also decided to invest up to $750 million in companies or projects in India and abroad.
The company was also involved recently in the biggest land deal of the country in the National Capital with an capital outlay of Rs 1,675 crore.
The DLF scrip joined the Bombay Stock Exchange’s market capitalisation-based benchmark Sensex within five months of its debut on the bourses. DLF’s market capitalisation is around Rs 1,47,500 crore.