Indiabulls Real to raise Rs 2.8k cr through QIP

MUMBAI: Realty major Indiabulls Real Estate on Monday announced plans to raise $600 million (Rs 2,820 crore) through qualified institutional placement (QIP) of equity shares. This is the first instance of a company that has taken advantage of the surge in the stock markets, post general elections.

According to the company, the decision was taken by the board of directors on Monday. The company also informed the BSE that it has decided to make an issuance of equity shares of a face value of Rs 2 to qualified institutional buyers (QIBs).

The QIP proceeds would be utilised for funding the company���s pending projects. It is expected that the company may utilise the funds for its power project planned in Maharashtra. It is believed that the allotment of the shares would be made within this week around Friday and Morgan Stanley is the lead book manager to the issue. Presently, the promoters hold around 25% in the company. It is believed that the promoters��� share may come down following the QIP. The Indiabulls stock gained 39% to close at Rs 205 in a strong Mumbai market on Monday.

Earlier, Indiabulls Power Services had raised Rs 1,600 crore from LN Mittal and Farallon Capital by divesting a 28.6% equity.

Domestic realty players are going through tough times due to liquidity constraints as well as shortage of fresh demand. New projects have since been put on the backburner while many of those under construction are being delayed.

Last week, the India���s largest listed developer, DLF raised $783 million through a share sale. DLF is also looking at selling some of its land parcels.

Another reality major Unitech had raised $325 million through a QIP last month. It is believed the QIP proceeds were used to bring down the company���s debt of Rs 8,900 crore. Unitech sold shares through the issue at a 11% discount to the stock���s last closing rate. However, market sentiments have dramatically improved since the Unitech issue.