Bengaluru builder Prestige Estates seeks to raise Rs 1,000 crore through NCDs

BENGALURU: India’s second-largest builder Prestige Estates Projects has said it plans to raise Rs 1,000 crore through issue of non-convertible debentures (NCD) via private placement and has sought shareholders’ approval.

“The NCDs may be issued in one or more tranches,” the company said in a filing to the Bombay Stock Exchange. The south-based real estate company will use the funds for its expansion plans. The proposal will be taken up at its annual general meeting on September 30.

In July, the builder had raised Rs 500 crore through issue of NCD to ICICI Prudential and Kotak Mahindra Trustee for retiring high cost debt, expansion and acquisition. The money was raised at a coupon rate of 11.27 per annum payable monthly. This is the largest real estate NCD issue for the current financial year.

NCDs are unsecured bonds that cannot be converted to company equity or stock and usually have higher interest rates. This instrument which offers healthy yields of 14-18% has emerged as this year's tool-of-choice for real estate firms to raise money.

The company's net debt stood at Rs 3,200 crore at the end of March 2015.