REALTORS RUSH FOR IPO APPROVALS

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} Seven Cash-Strapped Realty Cos FileRed Herring Prospectus with Sebi to Raise Rs 14,000 Cr The cash-strapped realty sector is scurrying for an initial public offer (IPO) cover with several buildersapproaching market regulator Securities & Exchange Board of India (Sebi) toseek approval to rise around Rs 14,000 cr or $3billion. At least seven realty companies , including Lodha Developers, Sahara Prime city, Emaar MGFand BPTP, have either filed the draft red herring prospectus (DRHP) with Sebisince Friday or plan to do it tomorrow. “Every company intending to do anIPO is in a hurry to file DRHP, as any delay beyond September 30 will forcethem to get their books audited again, which might delay the whole process,” abanker handling one large realty firms IPO said. The banker didn’t want him or his client to benamed for regulatory reasons. The audited balance sheet is validfor six months for filing prospectus. In case the company files the DRHP aftersix months of the annual report, it needs to incorporate audited numbers forproceeding six month period. Emaar MGF, , a joint venture betweenDelhi-based MGF and Dubai-based Emaar, Sahara Prime City, Lodha Developers andKumar Developers filed DRHP with Sebi on Tuesday. Delhi-based Ambience filedthe prospectus last Friday, while Delhi-based BPTP, Sriram Properties willlikely file tomorrow. BPTP, however, denied it was filing DRHP tomorrow. Emaar MGF plans to re-launch its IPOto raise 3,850 cr for 10% stake dilution. In addition, the promoter is alsodivesting 1.17 cr shares to mop up around Rs 400 cr. This means Emaar MGF islooking at a valuation of Rs 38,500 cr, as against a valution of Rs 70,000 crlast times round. Sahara group’s realty arm SaharaPrime City plans to rise up to Rs 3,450 cr through initial share sale. Mumbai-based Lodha Developers plansto raise Rs 2,700 cr, while BPTP and Ambience plan to raise Rs 2,000 cr and Rs1,100 cr respectively. Kumar Developers and Sriram Properties expect to raise Rs 400 cr and Rs 600 cr respectively. “We will use the IPO funds to retirehigh cost debt, pay for government license fee for our land and in developingour projects,” says Ambience chairman Raj Singh Gehlot. Led by real estate companies, thestock markets have been rallying this year with benchmark sensex registering again of 75% since January to close at 16,852 on Tuesday. Several listed realty firms,including DLF, Unitech, Indiabulls Real Estate, Sobha Developers and HDIL, wentin for successful qualified institutional placements (QIP) or promoter stakesale rising over $2 billion. The ability of listed realty players to raisefunds gave privately-held firms the confidence to test the primary market whichsaw a slump following the fall of realty firm Emaar MGF’s IPO early 2008. All listed realty companies werequick to tap the QIP route when markets improved because they were the ones whowere most leveraged. Once again they are the ones leading the IPO rush becauseof the same reason. Debt-ridden developers’ internalaccruals too haven’t picked up significantly as buyers have been slow to returnto the property market .Some of the developers are also under pressure from private equity (PE) funds,which earlier invested in those companies, to go public as it would give thePEs an exit route. Courtesy:- ET dt:- 30-09-09              

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