DLF to sell 50 acre for Rs 1,200 cr

Written by Rajat Guha | Rajat Guha | Vishakha Talreja | New Delhi | Updated: Nov 25 2010, 16:39pm hrs
DLF is planning to sell 50 acre of prime land in Gurgaon, one of the biggest plotted land development sale in the country. At the current price, the company would rake in at least Rs 1,200 crore from the sale. Plotted land sale are the ones where the parcel of land is sold without developing it.

The company is expected to make an announcement soon pertaining the sale at Gurgaon's Sector 73. DLF spokesperson could not be contacted for comments. However, according to officials familiar with the development, DLF could easily sell the plots at Rs 50,000-60,000 per square yard. Out of total 100 acre available with DLF in the area, it can sell only 50 acre for plotted development purpose.

DLF is launching two to three plotted developments in Gurgaon and one in greater Chandigarh near Mohali-Panchkula. It is also launching a plotted development in Indore, a premium apartment block in south Delhi and a residential project in south India. The company expects to garner Rs 2,000 crore over the next 12-18 months by selling land parcels and refunds from state governments on lands it wanted to return. The land parcels include those in New Gurgaon and hotel properties in West India, among others.

The proceeds from the sale would be used to retire the company's debt. DLF needs to pay Rs 1,666 crore in debt repayments by March 2011. It has repaid Rs1,224 crore so far in the current financial year. The company has raised Rs 413 core in the quarter ended September and a total of Rs 707 crore in the first half of the current fiscal by selling stake in its retail brand business and surplus land in some cities. In 2009, DLF had announced its plans to raise Rs 5,500 crore through the sale of non-core assets to reduce debt on the books. The company said it had reached the half-way mark in its divestment target in the last 18 months.

DLF has said that it will continue to use all free cash flows to reduce debt on an accelerated basis and keep improving tenure and quality of debt. The slew of launches in the second half of 2011 and increased percentage of construction will further add momentum to the cashflow. DLF's September quarter net profit was down 4.8% due to a sharp rise in the cost of land, plots and development rights. DLF posted a net profit of Rs 418.4 crore for the quarter compared to Rs 439.7 crore in the corresponding period last year.