DLF raises funds and repays part of it to MF

DLF raises funds and repays part of it to MF

Times of India, Jan 26, 2009, page no. 28

At a time when a host of real estate companies are finding it difficult to raise money to pay off their debts, K P Singh controlled DLF recently raised about Rs 900 crore. But the story doesn’t end with the fund raising. The Gurgaon-based real estate conglomerate then used part of the proceeds to repay about Rs 300 crore to a large mutual fund house, that too even before the due date. In boom times, many real estate companies had issued paper to raise funds for their projects. And they had found ready investors in the mutual funds, which had readily bought into the story of ever-rising property prices. At a time when many of these real estate companies are trying hard to keep their head above water, several mutual fund houses are still on the edge, mainly because of their legacy investments in real estate papers. Therefore, the move by DLF must have come as a surprise bonanza for some fund managers. Hopefully, other realty companies are looking at the DLF example.