HDIL initial offer opens June 28

MUMBAI: The realty boom in India has led to many construction companies taking to the capital market. After the success of DLF's 17.50-crore share offering, it is now the turn of Housing Development and Infrastructure Ltd. to try its luck.

The company's 3-crore share offering opens on June 28 through a 100% book building process. Mumbai-based HDIL has priced its Rs 10 shares between Rs 430 and Rs 500, according to a company release.

At the lower price band, the company will be raise Rs 1,290 crore and Rs 1,500 crore at the upper cap.

DLF had garnered Rs 9,187 crore at the issue price of Rs 525 per share.

The HDIL issue comprises reservation of up to 6 lakh shares for employees. Of the net 2.94 crore issue, 1.76 crore shares are reserved for qualified institutional buyers, and 29.40 lakh for non-institutional investors. Around 88.20 lakh shares are allocated for retail investors, according to the red herring prospectus filed with the Securities and Exchange Board of India.

The issue also has a greenshoe option of up to 45 lakh shares. Assuming the greenshoe option is not exercised, the net issue will constitute 14% of the fully diluted post issue paid-up capital. With the greenshoe, the net issue would 15.80% of the post issue capital. The issue closes on July 3.

The company has land reserves of 112 million square feet, of which 70% is owned by the company itself. Around 93.1 million square feet, or 82.8%, of its land reserves are in Mumbai. At present, HDIL is working on project area of 45.5 million square feet, according to a press release.

HDIL is in the business of real estate development including residential, commercial and retail projects, slum rehabilitation and land development. The company intends to acquire further land and land development rights in order to facilitate its expansion and diversification from the issue proceeds.

The company is also constructing and developing residential, commercial and retail projects in Palghar, on the outskirts of Mumbai, and Hyderabad and Kochi.

HDIL is part of the Wadhawan group, formerly known as the Dheeraj group. The comapny's turnover from sale of projects, developed land, and land development rights for the year ended March 31, 2007 was Rs 12, 041.9 million and net profit Rs 5,481.7 million.

Next on the IPO bandwagon is Omaxe's offer of 17.8 million shares. The company is seen pricing the shares at Rs 500 each.