Emaar MGF in 2nd attempt to float IPO

Emaar MGF in 2nd attempt to float IPO
Financial Cronical, August 26, 2009

By Vivek Sinha & Sanjeev Sharma

After last year's aborted move to go public, Emaar MGF is now seriously considering a second attempt to to raise around Rs 3,500 crore through an initial public offering, reports Financial Chronicle.

The real estate company, which is a joint venture between the Dubai-based Emaar Properties and Delhi-based MGF Development, is in advanced discussions with investment bankers about the contours of the issue, the report added.

Citing sources close to the development, the report said the company is considering to go in for a smaller IPO, sometime in October, wherein it would dilute around 10-15 per cent of its equity.

Kotak, JP Morgan Chase, DSP Merrill Lynch, Deuts-che Bank, Enam Securities are among investment ban-kers holding discussions for the mandate, the sources said.

"Emaar MGF continues to evaluate various funding options to meet its growth plans. However, we are not in a position to comment on the specifics of any of our fund raising plans,” quoted Emmar spokesperson in the report.

According to the report, the firm plans to utilise the proceeds from the IPO to develop projects on various land parcels it owns. At December-end 2007, Emaar MGF owned around 13,000 acres across the country, it added.

Real estate firms have been aggressively raising funds following the liquidity crunch and balance sheet stress last year.

Another real estate major Ansal API announced its plans to discuss various fund raising initiatives at its board meeting on the August 28 of this month. When contacted, Anil Kumar CEO of Ansal API said, "The board will discuss all possible options to raise funds."

In February 2008, Emaar MGF had attempted to raise around Rs 7,000 crore through an IPO. It aborted its plans to sell 102.6 million shares after receiving a weak response to the issue.

It had to reduce its price band and push back the closing date by five days but finally decided to call off the offer when subscriptions fell from 83 per cent to 43 per cent of the shares offered.

The original price band was Rs 610-690, which was revised to Rs 530-560.