Parsvnath Q1 net plunges 81%, co in talks to raise $100-150m

Parsvnath Q1 net plunges 81%, co in talks to raise $100-150m
The Economic Times, July 31, 2009, Page 4

Our Bureau NEW DELHI

DELHI-BASED Parsvnath Developers on Thursday said it is in talks with investors to raise $100-150 million in fresh equity through qualified institutional placement (QIP) within the next two months. The company said that the real estate sector had seen off the worst after its net profit for the June quarter increased 20% on a sequential basis over the March quarter even as it fell as much as 81% over the same quarter last year.

“We see things improving from here on in the property market. With better sentiment and the government announcing a number of measures, including tax benefits for developers of affordable homes and interest subsidy for homebuyers, we think real estate market will bounce back soon,” Parsvnath Developers chairman Pradeep Jain said, adding that demand has slowly started picking up.

The company reported a net profit of Rs 14 crore on revenues of Rs 113 crore for the June quarter. Revenue declined 70% from the year-ago quarter. The company attributed lower sales and profits to poor demand for homes as homebuyers, worried about their personal economic future, stayed away from the residential market last quarter.

Mr Jain said the company planned to raise $100-150 million (approx. Rs 500-700 crore) via QIP, “We will use 60% of QIP fund to repay debt and rest to strengthen our business.”

The company has been able to reduce its debt by Rs 400 crore to Rs 1,600 crore in nine months since September ‘08, he added. Parsvnath’s scrip closed 1.5% up at Rs 116.95 on Thursday. The company’s earnings were announced after the market hours.