Sunteck to raise Rs 500 cr via QIP

MUMBAI: Sunteck Realty is planning to raise up to Rs 500 crore in October through a qualified institutional placement (QIP) of shares. The Mumbai-based property firm, which may mop up the amount in tranches, intends to use the proceeds for buying stressed assets and finance affordable housing projects.

There has been a flurry of QIPs by real estate firms, with players such as Unitech, HDIL and Indiabulls, having tapped the market. However, a few companies were forced to hold back offerings due to investor apathy. Orbit Corporation, which had earlier announced a Rs 500 crore QIP, will float a Rs 250 crore issue to begin with.

Sunteck will decide to raise only a part of the total fund requirement in October. ���Since we need the QIP proceeds for funding expansion, we could raise it in tranches, depending on valuations the market offers. We are exploring opportunities in affordable housing,��� said Sunteck MD Kamal Khetan. Recently, the company has restructured its capital, splitting each share of Rs 10 face value into 5 shares of Rs 2 each.

Many property firms tapped the QIP market to repay their expensive borrowings. But post Budget, a drop in FII appetite for property shares resulted in several companies deferring their QIP plans or reducing the issue size.