Parsvnath to raise Rs 2.5k cr via QIPs to tackle resource crunch
The Financial Express, Corporates & Markets, May 26, 2009, Page 1
fe Bureau, New Delhi
Faced with severe resource crunch, realty firms are increasingly opting for the qualified institutional placement (QIP) route to raise funds. The latest to look at raising funds through this route is the Delhi-based realtor Parsvnath, which is planning to raise Rs 2,500 crore.
"The board has decided to raise funds by various means, including through issuance of further securities to persons other than the existing equity shareholders of the company and also by way of QIP to qualified institutional buyers for raising a sum of up to Rs 2,500 crore," Parsvnath said in a filing to the Bombay Stock Exchange.
Pradeep Jain, chairman, Parsvnath told FE, “We are not going to raise the entire fund at one go. By end of June when we get shareholder’s approval, we will decide how much of funds will be realised and how much of stake dilution will take place.” Jain also said, “We will be paying off around Rs 800-900 crore during this financial year. This will not only come from the fund we raise just through the QIP route but also from internal accruals.” The debt of Parsvnath stands at Rs 1,600 crore and the debt equity ratio is 0.8. Jain also informed that the fund will be utilised to speedily complete the ongoing projects, which include residential, both mid-segment and premium, integrated township, Delhi metro retail projects, hospitality and SEZs.
Industry analysts believe that the freshly raised funds will go into projects which will fetch quick returns rather than long gestation projects. Integrated townships need a lot of investments and take a lot of time to develop, so these projects will probably be at the backburner right now. Projects which will generate cash immediately like SEZs and hotels will get a thrust.
DLF recently raised Rs 3,860 crore with the promoter family of K P Singh selling their 9.9% stake in the company. The country's second largest real estate firm, Unitech raised Rs 1,625 crore through QIP. Promoters' stake in DLF is at 78.8% from the earlier 88.5%, and in Unitech at 51.2% from 64% previously.
Realty firms had leveraged themselves too much during boom time. Right now, however, they are reeling under huge debt and cash crunch to go forward with their ongoing projects. The debt of DLF is Rs 16,358 crore, Unitech's at Rs 8,500 crore, HDIL's at Rs 4,000 crore, Sobha Developers' at Rs1,850 crore, Parsvanath's Rs 1,600 crore and Omaxe's at Rs 1,500 crore.
The Financial Express, Corporates & Markets, May 26, 2009, Page 1
fe Bureau, New Delhi
Faced with severe resource crunch, realty firms are increasingly opting for the qualified institutional placement (QIP) route to raise funds. The latest to look at raising funds through this route is the Delhi-based realtor Parsvnath, which is planning to raise Rs 2,500 crore.
"The board has decided to raise funds by various means, including through issuance of further securities to persons other than the existing equity shareholders of the company and also by way of QIP to qualified institutional buyers for raising a sum of up to Rs 2,500 crore," Parsvnath said in a filing to the Bombay Stock Exchange.
Pradeep Jain, chairman, Parsvnath told FE, “We are not going to raise the entire fund at one go. By end of June when we get shareholder’s approval, we will decide how much of funds will be realised and how much of stake dilution will take place.” Jain also said, “We will be paying off around Rs 800-900 crore during this financial year. This will not only come from the fund we raise just through the QIP route but also from internal accruals.” The debt of Parsvnath stands at Rs 1,600 crore and the debt equity ratio is 0.8. Jain also informed that the fund will be utilised to speedily complete the ongoing projects, which include residential, both mid-segment and premium, integrated township, Delhi metro retail projects, hospitality and SEZs.
Industry analysts believe that the freshly raised funds will go into projects which will fetch quick returns rather than long gestation projects. Integrated townships need a lot of investments and take a lot of time to develop, so these projects will probably be at the backburner right now. Projects which will generate cash immediately like SEZs and hotels will get a thrust.
DLF recently raised Rs 3,860 crore with the promoter family of K P Singh selling their 9.9% stake in the company. The country's second largest real estate firm, Unitech raised Rs 1,625 crore through QIP. Promoters' stake in DLF is at 78.8% from the earlier 88.5%, and in Unitech at 51.2% from 64% previously.
Realty firms had leveraged themselves too much during boom time. Right now, however, they are reeling under huge debt and cash crunch to go forward with their ongoing projects. The debt of DLF is Rs 16,358 crore, Unitech's at Rs 8,500 crore, HDIL's at Rs 4,000 crore, Sobha Developers' at Rs1,850 crore, Parsvanath's Rs 1,600 crore and Omaxe's at Rs 1,500 crore.
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