Indiabulls Real Estate raises $550 mn through QIP

Indiabulls Real Estate raises $550 mn through QIP
Business Standard, May 20, 2009, Page 6

BS Reporter / Mumbai

Indiabulls Real Estate (Ibrel), a major property developer, has raised $550 million (Rs 2,585 crore) by selling shares at a discount to overseas investors on Monday, a person involved with the share sale said.

Ibrel sold 139.7 million shares at Rs 185 a share to investors, including TPG Capital and Fidelity, the source said. The issue price was 6 per cent lower than Monday’s price of Rs 197.50, when the Sensex soared by over 2,111 points.

However, the issue price is 60 per cent higher than the company’s six-month average price of Rs 115.66.

Ibrel, which opened its $600 million issue on Monday, received subscription worth $2 billion (Rs 9,400 cr), a company source said. The company spokesperson did not respond to calls on the development.

“The response to the issue was good. Investors got 20-30 per cent of what they applied for,” sources said, without elaborating. Morgan Stanley was the lead manager.

The development comes on the same day when Ibrel’s board approved the $600 million qualified institutional placement (QIP) in its extra-ordinary general meeting.

Though the company did not say anything on the end use of the QIP proceeds, sources said it was expected to be used for power projects, mainly the 1,320 Mw one planned to be built at Amravati, Maharashtra, and for new businesses.