Akruti City to raise $500 m through QIP

Akruti City to raise $500 m through QIP
The Economic Times, June6, 2009, Page 5

Our Bureau MUMBAI

MUMBAI-BASED real estate company Akruti City plans to raise up to $500 million through the qualified institutional placement (QIP) route. It is gathered that the funds raised through the proposed QIP would be used for Akruti’s projects in Mumbai that are currently under construction.

The company, like many other real estate companies, was facing a liquidity crunch for a while now and had gone slow on many of its projects. Akruti is yet to announce its results for the year ended March 31, 2009, and the debt on its balance sheet at the end of March 2008 stood at Rs 625 crore. When queried on the debt position, Akruti City managing director Vimal Shah said it was minimal.

The QIP proceeds are expected to be utilised for the Slum Rehabilitation Authority (SRA) project in Andheri in western Mumbai among others. Akruti also has a joint venture with DLF for a couple of projects in Mumbai. As reported earlier by ET, DLF has been looking at selling some of its assets, one of which is a JV with Akruti. Akruti joins the list of real estate companies that have taken the QIP route in the last few months. After Unitech and Indiabulls Real Estate raised close to $900 million, HDIL and Orbit too have announced plans to raise money through QIPs.