Indiabulls QIP sold in a day

Indiabulls QIP sold in a day
The Economic Times, May 20, 2009, Page 17

Our Bureau MUMBAI

INDIABULLS Real Estate is learnt to have sold its $600-million qualified institutional placement (QIP) in a day. Sources close to the issue said the country’s third largest developer had received total applications worth $2 billion from private equity and hedge funds including Farallon, TPG Capital, Och Zoff, Moon Capital and Fidelity. It is also learnt that the company has placed the QIP at Rs 185 per share, slightly lower than the ruling market price of the stock. The Indiabulls stock closed at 199.75 on Tuesday.

When contacted, Indiabulls CEO Gagan Banga said: “I can only say that the book has been closed. I would not be able to share the details of the issue at this point of time.”

Indiabulls announced its plans to raise funds through QIP on Monday. It was the first instance of an equity issue which was aimed at riding the improved sentiment in the stock markets, post general elections. The issue opened on Tuesday. Morgan Stanley is the advisor to the issue. Indiabulls is expected to announce the details of the issue by this week.

Domestic realty players are going through tough times due to liquidity problems as well as shortage of fresh demand. New projects were put on the backburner for some time while many of those under construction are delayed. Though this situation, say industry experts, may improve following the performance of BSE during past two days. Last week the India’s largest listed developer, DLF raised $783 million through a share sale. DLF is also looking at selling some of its land parcels.

Another realty major Unitech had raised $325 million through a QIP last month. It is believed the QIP proceeds were used to bring down the company’s debt of Rs 8,900 crore. Unitech sold shares through the issue at a 11% discount to the stock’s last closing rate. However, market sentiments have dramatically improved since the Unitech issue.