The first Securities and Exchange Board of India (SEBI) recognised real estate venture capital fund (VCF) in Kerala was launched in Kozhikode on Wednesday.
Named Secura, the first private VCF of the state was jointly started by Hi-lite group, a major real estate player, and a group of professionals.
The company was launched by Principal Secretary to Industries T. Balakrishnan at Hotel Hyson Heritage here. Secura Managing Director M. A. Mehaboob said the fund would be operated in accordance with the ‘Shariah’ laws and regulations.
Minimum investment
According to him, the company plans to mobilise Rs. 50 crore initially with the closing date on July 31. Minimum investment limit is Rs. 5 lakh and investments can be made in different instalments. An investor need to give only 20 per cent of the investment as the first instalment.
The balance can be paid in 18 months in instalments. There is no higher limit for investment.
Saturday, May 9, 2009
What to DO to boost the realty sector and Take it Out From Current Phase
The past two years have been eventful for the real estate industry, which saw
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
What to DO to boost the realty sector and Take it Out From Current Phase
The past two years have been eventful for the real estate industry, which saw
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
unprecedented highs and unimaginable lows, all within a very
short span of time.
But while the world and India tanked into one of the deepest recessions since the great depression of 1929, the government came to recognise that the real estate industry has been one of the primary drivers of the economy, carrying with itself close to 200 small and medium industries and contributing 4.5 per cent to the GDP with a potential to contribute much more.
In a week from now as India gets set for a new government, the real estate industry has drawn up a comprehensive wish list for growth and development of real estate on a sustainable basis.
Niranjan Hiranandani, MD, Hiranandani group and one of the pioneers of the modern real estate industry says, "For the past 60 years the government has only focused on 'roti' and 'kapda'. While that is still very important, it has to also focus on 'makaan' with equal zeal, as that is the third most basic necessity for human survival and an indicator of a nation's prosperity as a whole.
Hence making things easier for the housing industry, so that more supply is possible, is on everybody's mind. Certain procedures have to be simplified and more cooperation is needed to make mass housing possible . Secondly the industry is labour-oriented which can generate a huge amount of employment, contributing hugely to GDP. Hence the government has to look at real estate industry more seriously."
Ram Yadav, head, finance and strategy, Orbit Corporation, takes the discussion on the next level, saying: "We have moved into a different era as the real estate industry has turned more professional, sophisticated and enterprising. It has acquired respectability. While the onus is on the developers to bring in global standards and transparency, the government has to play its part in simplifying the process of clearances by providing a single regulatory body and uniform laws across the country as the business has now become big enough to attract foreign money."
Abhisheck Lodha, director, Lodha Group, corroborates this. "The wish list will revolve around two sets of things. Firstly, the continuation of the overall development and liberalisation of the economy and secondly, streamlining the regulations and clearance process to reduce the time lapse in starting the project, besides making policy measures to boost lowcost housing. Lowering of interest rates is a gradual process but the government should work on making the market more transparent, encouraging private sector participation and act on policy level to make a difference."
Besides these, developers repeatedly emphasise on simplification of taxes on construction materials like cement, steel and other essential commodities. With cement prices escalating at Rs 260 to Rs. 300 a bag, mass housing could remain a dream feel developers.
Jayant Gehi, GM, Marketing, Mayfair Housing agrees. "Land regulation is under the jurisdiction of the state government, but the central government issues policy directions from time to time which are not always followed by the states. The central government has to see them being followed through measures like conditional funding, as they have done under the JNNURM scheme. Similarly, cement cartelisation must also be controlled."
The government should address the need for uniform laws, says Ram Yadav. "It should clearly define whether the units should be sold on carpet area or any other parameter. Whatever the case may be there has to be a clear-cut definition of the saleable area with no scope for ambiguity. The formalities of acquiring a home should also be simplified. It is only in this way that the industry could be freed from its continuous cyclical boom and bust scenarios and the supply could be absorbed by a larger number of people."
According to FICCI, the rate of stamp duty on properties is exorbitant and varies from state to state between 8 to 12 per cent. This needs to be drastically reduced and made uniform across states.
Yadav recommends better regulation and widening the scope for foreign direct investments, and encouragement of REIT and REMF as it is only through these measures that real estate will be able to attract the large amount of money that is required for the kind of development we are envisaging for future development.
Mayur Shah, MD, Marathon Group, says: "The wish list for the new government would firstly include the reintroduction of the scrapped 80IB tax benefit for units below1500 sq ft to encourage LIG housing."
He adds, "Also government should allow foreign buyers to invest in commercial property as FDI is one of the greatest contributors in the real estate sector. The need for foreign investment is due to scarcity of funds. Increment of bank funding on a long-term basis is also required for continued growth of real estate on a sustained basis.
Kerala Based Builders Launch Real Estate Venture Capital Fund
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31.
At a time when the real estate sector is going thorugh liquidity problems,the promoters of the Hi-lite Group, Kerela Based builders have launched a real estate focused venture capital fund.
Secura India Real Estate Fund, Kerela’s first SEBI recognised real estate venture capital fund, has been launched in Kozhikode. It will be a Shariah compliant fund. Besides the Hi-lite group, the fund is also promoted by a group of real estate professionals.
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31. The minimum investment limit, is reportedly Rs 5 lakhs and the investments can be made in various installments. An investor would need to pay only 20% of the total investment as the first installment and the rest of the installments can be paid over a period of 18 months.
The VC investment in any project would be typically at land Cost stage, under which the fund would invest and collaborate with developers/land owners from inception to completion. It would also provide capital for land acquisition in the high potential locations for development.
The fund would be involved in the shaping the direction of the project and may do so through active involvement in the special purpose vehicles (SPVs). The fund’s managing director,M.A. Mehaboob is the promoter and Director of hi-lite Builders Private Limited.
At a time when the real estate sector is going thorugh liquidity problems,the promoters of the Hi-lite Group, Kerela Based builders have launched a real estate focused venture capital fund.
Secura India Real Estate Fund, Kerela’s first SEBI recognised real estate venture capital fund, has been launched in Kozhikode. It will be a Shariah compliant fund. Besides the Hi-lite group, the fund is also promoted by a group of real estate professionals.
The fund targets an initial corpus of Rs 50 crore, the closing date being July, 31. The minimum investment limit, is reportedly Rs 5 lakhs and the investments can be made in various installments. An investor would need to pay only 20% of the total investment as the first installment and the rest of the installments can be paid over a period of 18 months.
The VC investment in any project would be typically at land Cost stage, under which the fund would invest and collaborate with developers/land owners from inception to completion. It would also provide capital for land acquisition in the high potential locations for development.
The fund would be involved in the shaping the direction of the project and may do so through active involvement in the special purpose vehicles (SPVs). The fund’s managing director,M.A. Mehaboob is the promoter and Director of hi-lite Builders Private Limited.
DLF may face Rs 400-crore tax blow as per Economic Times
India's largest real estate company DLF will have to pay additional tax of
Rs 300-400 crore to the government for the financial
year 2005-06, after the income-
Tax (I-T) department in a special investigation found that the realty company’s books showed an income lower by Rs 1,200 crore for the given year. DLF was issued a directive in this regard on Wednesday.
The real estate developer plans to challenge the government’s order. “We have 90 days to file the appeal,” said DLF CFO Ramesh Sanka. In a filing to the National Stock Exchange (NSE) on Thursday, DLF said: “The company has got an expert opinion on the enhanced taxable income and is confident that this addition will not be sustained by the appellate authorities.” It is estimated that the I-T department order may result in a contingent liability of Rs 300-400 crore.
DLF shares fell 0.43% to 244.9 on the Bombay Stock Exchange, as the benchmark Sensex rose 1.37% on Thursday. The government order has come at a time, when the company is dealing with a deep slump in the realty sector and a sharp decline in its income. The additional tax outgo will put further pressure on the company’s cashflow.
The I-T department in December had ordered a special audit to evaluate the tax filings of the company for FY06. The special audit report recommended that the tax department reassess approximately Rs 1,200 crore as additional income, as per DLF’s filing to NSE on Thursday.
Following the report and assessment proceedings, the assessment office has “issued an assessment order adding substantially most of the amount suggested by the special audit report”, said the company.
In FY06, accounting norms for construction and real estate development companies changed. This was the first year when all real estate development companies, including DLF, compulsorily started using percentage of completion method (PoCM) for recognising revenues, and consequently, profits. PoCM means recognition of revenue as the construction progresses.
Under this method, most companies, including DLF, start recognising revenues on their books after 30% of the project cost (land plus construction cost) is incurred. Besides, the revenues are recognised only for the equivalent portion of the project, which has been sold to the customers. For example, if the project is half complete, but has been sold only 20%, then the revenue will be recognised only to the extent of 20% and rest will be inventory.
Before PoCM became compulsory, real estate companies used to follow completed contract method, whereby revenue was recognised only after the entire project was completed.
Rs 300-400 crore to the government for the financial
year 2005-06, after the income-
Tax (I-T) department in a special investigation found that the realty company’s books showed an income lower by Rs 1,200 crore for the given year. DLF was issued a directive in this regard on Wednesday.
The real estate developer plans to challenge the government’s order. “We have 90 days to file the appeal,” said DLF CFO Ramesh Sanka. In a filing to the National Stock Exchange (NSE) on Thursday, DLF said: “The company has got an expert opinion on the enhanced taxable income and is confident that this addition will not be sustained by the appellate authorities.” It is estimated that the I-T department order may result in a contingent liability of Rs 300-400 crore.
DLF shares fell 0.43% to 244.9 on the Bombay Stock Exchange, as the benchmark Sensex rose 1.37% on Thursday. The government order has come at a time, when the company is dealing with a deep slump in the realty sector and a sharp decline in its income. The additional tax outgo will put further pressure on the company’s cashflow.
The I-T department in December had ordered a special audit to evaluate the tax filings of the company for FY06. The special audit report recommended that the tax department reassess approximately Rs 1,200 crore as additional income, as per DLF’s filing to NSE on Thursday.
Following the report and assessment proceedings, the assessment office has “issued an assessment order adding substantially most of the amount suggested by the special audit report”, said the company.
In FY06, accounting norms for construction and real estate development companies changed. This was the first year when all real estate development companies, including DLF, compulsorily started using percentage of completion method (PoCM) for recognising revenues, and consequently, profits. PoCM means recognition of revenue as the construction progresses.
Under this method, most companies, including DLF, start recognising revenues on their books after 30% of the project cost (land plus construction cost) is incurred. Besides, the revenues are recognised only for the equivalent portion of the project, which has been sold to the customers. For example, if the project is half complete, but has been sold only 20%, then the revenue will be recognised only to the extent of 20% and rest will be inventory.
Before PoCM became compulsory, real estate companies used to follow completed contract method, whereby revenue was recognised only after the entire project was completed.
Real estate stocks boom
Real estate companies are on a roll on the bourses. In less than two months
since the BSE sensex saw its 2009 bottom on March 9,
price of six realty stocks on the
BSE have more than doubled while price of 26 stocks have gained over 50% during the same period. Compared to this, the BSE sensex has gained about 46%.
On an aggregate basis however, investors in these stocks have made just about Rs 31,000 crore during this period with combined market capitalisation of 54 listed realty stocks at Rs 77,400 crore.
While analysts said a combination of factors have led to this sudden surge in stock prices, market players are advising caution to investors.
At least three reasons have led to the spurt in real estate stocks: the recent spate of debt restructuring by the highly-leveraged real estate companies, some pick up in sales volumes, at least by the sector leaders, and sale of assets or reduction in land banks, sector analysts said.
The third reason for the rally is lately some of the large firms sold part of their assets or backed out of ambitious projects. Meanwhile, Heavy selling after midsession gains, weighed on the local bourses as sensex dropped by 178 points.
since the BSE sensex saw its 2009 bottom on March 9,
price of six realty stocks on the
BSE have more than doubled while price of 26 stocks have gained over 50% during the same period. Compared to this, the BSE sensex has gained about 46%.
On an aggregate basis however, investors in these stocks have made just about Rs 31,000 crore during this period with combined market capitalisation of 54 listed realty stocks at Rs 77,400 crore.
While analysts said a combination of factors have led to this sudden surge in stock prices, market players are advising caution to investors.
At least three reasons have led to the spurt in real estate stocks: the recent spate of debt restructuring by the highly-leveraged real estate companies, some pick up in sales volumes, at least by the sector leaders, and sale of assets or reduction in land banks, sector analysts said.
The third reason for the rally is lately some of the large firms sold part of their assets or backed out of ambitious projects. Meanwhile, Heavy selling after midsession gains, weighed on the local bourses as sensex dropped by 178 points.
Indiabulls Real Estate to raise $150 million from QIP issue
Property developer Indiabulls Real Estate (IBREL) is talking to investors to raise at least $150 million (Rs 750 crore) from sale of shares to select investors as part of its qualified institutional placement (QIP) plan.
The Mumbai-based real estate developer has begun its road show and has hired Morgan Stanley as adviser. A spokesperson confirmed the hiring of the investment banker.
Indiabulls Real Estate had announced last month that it planned to raise $600 million (Rs 3,000 crore) from sale of shares from a QIP issue.
The money from the QIP is expected to be used to fund its power projects, mainly the 1,320 megawatt project planned to be built in Amaravati, Maharashtra.
The company plans to seek shareholders’ approval at a meeting on May 18.
The QIP was expected to be a precursor to the initial public issue being planned by the company, sources said.
Sources involved with the development say the company plans to complete the issue soon after a clear picture emerges on who will form the next government at the Centre.
Indiabulls Real Estate shares have risen 11 per cent this month and 8.9 per cent this year, compared with 23.11 per cent gain that the benchmark sensitive index has recorded this year.
Indiabulls Real Estate had, earlier this week, said it failed to raise Rs 2,322 crore from promoters and key officials as they did not convert the warrants issued to them into equity. The promoters did not convert as the company’s shares were trading about 74 per cent below the conversion price of Rs 540 per warrant.
IBREL had issued 43 million warrants in November 2007 to promoters and joint managing directors on a preferential basis. The last date for conversion was May 4 2009.
The Mumbai-based real estate developer has begun its road show and has hired Morgan Stanley as adviser. A spokesperson confirmed the hiring of the investment banker.
Indiabulls Real Estate had announced last month that it planned to raise $600 million (Rs 3,000 crore) from sale of shares from a QIP issue.
The money from the QIP is expected to be used to fund its power projects, mainly the 1,320 megawatt project planned to be built in Amaravati, Maharashtra.
The company plans to seek shareholders’ approval at a meeting on May 18.
The QIP was expected to be a precursor to the initial public issue being planned by the company, sources said.
Sources involved with the development say the company plans to complete the issue soon after a clear picture emerges on who will form the next government at the Centre.
Indiabulls Real Estate shares have risen 11 per cent this month and 8.9 per cent this year, compared with 23.11 per cent gain that the benchmark sensitive index has recorded this year.
Indiabulls Real Estate had, earlier this week, said it failed to raise Rs 2,322 crore from promoters and key officials as they did not convert the warrants issued to them into equity. The promoters did not convert as the company’s shares were trading about 74 per cent below the conversion price of Rs 540 per warrant.
IBREL had issued 43 million warrants in November 2007 to promoters and joint managing directors on a preferential basis. The last date for conversion was May 4 2009.
Subscribe to:
Posts (Atom)
Posts
