Workers walk past a DLF Ltd. office-block construction site in Gurgaon, India.(Photographer: Pankaj Nangia/Bloomberg News)

DLF Promoters To Infuse Rs 11,250 Crore; Board Okays QIP

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Summary
  • The issue is part of DLF’s objective to reduce net debt significantly.
  • The board also gave its nod to selling shares through public issue or private placement to institutional investors.
  • The debentures would be converted into an equivalent number of equity shares.
  • The board also approved the offer and issue up to 17.30 crore equity shares to eligible investors.
  • DLF plans to raise around Rs 3,500 crore through sale of shares to institutional investors, as per sources.

Realty major DLF Ltd.’s board today approved issue of debentures and warrants to promoters in lieu of Rs 11,250 crore equity infusion into the company, as part of its objective to reduce net debt significantly.

The board also gave its nod to selling shares through public issue or private placement to institutional investors. The company is estimated to raise more than Rs 3,500 crore through this process.

In late August, the promoters had sold the entire 40 percent stake in rental arm DLF Cyber City Developers Ltd for Rs 11,900 crore and proposed to invest proceeds into DLF.

This deal included sale of 33.34 percent stake in DCCDL to Singapore's sovereign wealth fund GIC for Rs 8,900 crore and buyback of remaining shares worth Rs 3,000 crore by DCCDL.

In a filing to the BSE, DLF today said its board has approved the preferential offer and issue of upto 37.97 crore compulsorily convertible unsecured debentures to the promoters for cash.

Also Read: DLF’s Debt Swells Rs 900 Crore To Rs 26,800 Crore

The debentures would be converted into equivalent number of equity shares at Rs 217.25. That apart, the board approved the preferential issue of up to 13,80,89,758 warrants to the promoters being convertible into shares at the same price.

Upon completion of the issue of debentures and warrants and conversion into equity shares, “the total additional amount of promoter/promoters group's equity contribution to the company will be approximately Rs 11,250 crore.”

The board also approved the offer and issue upto 17.30 crore equity shares to eligible investors, in one or more tranches, in India or overseas, by way of public issue or a private placement or a qualified institutional placement.

It approved increase of authorised share capital of the company from Rs 500 crore to Rs 1,000 crore. The board also approved the appointment of Ashok Kumar Tyagi and Devinder Singh as whole time directors of the company for a period of five years with effect from Dec. 1, 2017.

India's largest realty firm plans to raise around Rs 3,500 crore through sale of shares to institutional investors, sources had said.

Infusion of capital by promoters will lead to increase in promoters’ stake in DLF to more than 75 percent. So, the company plans to launch a QIP or public issue to maintain the minimum public shareholding limit of 25 percent.

DLF will use the funds to reduce net debt, which has surged to nearly Rs 27,000 crore because of huge demand slowdown in the real estate sector since last many years.

Also Read: CCI Approves GIC’s Rs 9,000 Crore Deal With DLF’s Rental Arm

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