India’s largest realty firm DLF today said it expects an infusion of Rs 13,000 crore into the company, a better part from promoters, by December and the amount will be utilised for reducing its debt substantially. The company expects over Rs 10,000 crore from promoters and another Rs 3,000 crore from institutional investors, according to sources. DLF had a net debt of nearly Rs 26,000 crore at the end of the June quarter and out of that Rs 5,500 crore pertained to its rental arm DLF Cyber City Developers Ltd (DCCDL).
DLF promoters — K P Singh and family — last week decided to sell their entire 40 per cent stake in the DCCDL for Rs 11,900 crore and will infuse the net proceeds into the DLF for debt repayment. This deal, the biggest in the country’s realty space, included sale of 33.34 per cent stake to Singapore’s sovereign wealth fund GIC for Rs 8,900 crore and a buyback of remaining shares worth Rs 3,000 crore by DCCDL.
Post this deal, DLF will have 66.66 per cent stake in the DCCDL and GIC 33.34 per cent stake in the joint venture. “Gross proceeds to the promoters from the transaction would be Rs 11,900 crore. The net proceeds to the promoters are estimated to be in excess of Rs 10,000 crore post applicable taxes,” DLF said in an analyst presentation.
The promoters intend to infuse a substantial part of the net transaction proceeds into DLF, it said, adding that the deal is expected to get completed by November after all regulatory approvals including that of the CCI.
According to the presentation, DLF expects an investment to the tune of Rs 13,000 crore into the company which will help it in reducing the debt of residential vertical significantly.
While promoters are expected to invest about Rs 10,500 crore into the company, DLF expects to raise another Rs 3,000 crore from institutional investors through Qualified Institutional Placement (QIP), market sources said.
DLF will have to hit capital market as promoters’ shareholding will cross the minimum threshold of 75 per cent post infusion of fund by them. With infusion of Rs 13,000 crore fund into DLF and expected receipt of Rs 1,500 crore from some other assets, the company’s debt, excluding that of DCCDL, will come down sharply to Rs 6,000 crore from current Rs 20,500 crore.