DLF Expects To Halve Its Debt By March Next Year
DLF expects to lower debt its to Rs 2,000-2500 crore by March 2020 and to zero over the next few quarters.
DLF Ltd. expects to pare its debt by half by March next year and to nil over the subsequent quarters, chief financial officer Ashok Tyagi has said.
Net debt of India’s largest realty developer by market value is around Rs 4,500 crore as of March, along with land liabilities worth Rs 800 crore, Tyagi told BloombergQuint in an interview. “We expect that (debt) to be down to Rs 2,000-2500 crore by March 2020 and will run the residual Rs 2,000-crore debt to zero over the next few quarters.”
From a deleveraging balance sheet structuring standpoint, he said the “chapter is almost complete.”
DLF also has to pay Rs 8,700 crore to DLF Cyber City—the joint venture of DLF and GIC Pte Ltd.—and it aims to settle dues by September through transfer of rental assets and land parcels. It paid an installment of Rs 2,950 crore in May. In order to reduce debt and pre-pay loans, the company had issued a qualified institutional placement in March, through which it raised Rs 3,200 crore.
The liquidity crisis among non-bank lenders was a cause of concern for the real estate sector but DLF is completely secure as far as liquidity is concerned, Tyagi said.
“Our debt-equity is lower than 0.1:1. We hardly have any debts.” But that may not be the case for the sector at large, he cautioned. “For the sector at large, especially for small and medium businesses, liquidity continues to be a stress point.”
The company also expects to report operating profit more than Rs 2,000 crore for the ongoing financial year. “Our Ebitda-interest ratio will be at 10:1 next year compared to 1:1 a few years ago.”
Watch the interaction with the management here: