DLF planning to move ahead with QIP by June to pay off debts

Realty major DLF plans to raise an estimated Rs 3,000 crore through the sale of equity shares to qualified institutional investors. Aiming to become a debt-free company, DLF had last year announced plans to issue up to 17.3 crore shares through qualified institutional placement (QIP) to raise funds and pre-pay loans.

"We are looking to complete QIP by June this year," DLF group CFO Ashok Tyagi told PTI in an interview. The QIP proceeds and further infusion of Rs 2,500 crore from promoters against the issue of warrants would help the company in significantly reducing the debt that stood at around Rs 7,200 crore as on December 31, 2018, he said.

Moreover, the company is ready to move housing inventories worth Rs 12,500 crore which is being targeted to be sold in the next 3-5 years. "We are currently selling Rs 600 crore worth properties every quarter. These sales proceeds will also be utilised towards reducing debt," Tyagi said.

DLF promoters K P Singh and family have already infused Rs 9,000 crore in the company and would pump in Rs 2,250 crore more. The company made a preferential allotment of compulsorily convertible debentures (CCDs) and warrants to the promoters against the infusion of funds. As the infusion of the fund by promoters will lead to an increase in their shareholdings beyond permissible limit of 75 per cent, the company plans to launch QIP and maintain minimum public shareholding of 25 per cent in a listed entity.

In August 2017, the promoters had sold entire 40 per cent stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 11,900 crore and committed to infusing bulk of this amount in the company to cut net debt. This deal included the sale of 33.34 per cent stake in DCCDL to Singapore's sovereign wealth fund GIC for Rs 8,900 crore and buyback of remaining shares worth Rs 3,000 crore by DCCDL. The deal concluded in December 2017. As a result, DLF stake in DCCDL increased to 66.66 per cent stake from 60 per cent, while GIC has a balance of 33.34 per cent stake in the joint venture firm.

(With inputs from agencies.)