The country’s biggest realty player DLF said it plans to raise Rs 1,000 crore through unsecured loans by the end of this month, while hinting that prices in the housing segment could witness an increase.
“We have mandated Axis Bank to raise Rs 1,000 crore through non-convertible debentures (NCDs),” DLF Executive Director (Finance) Saurabh Chawla told reporters on the sidelines of a CII event in New Delhi.
NCDs are unsecured loans to a firm with no provisions to exchange debt for corporate stock.
“The money will be raised by the end of this month and it will primarily be used for retiring our debt,” he said, adding that NCDs will be for a period of three years at an interest rate of 10.5 per cent.
The realty major has a net debt of Rs 12,830 crore as of third quarter ended December 2009.
DLF Group Executive Director Rajiv Talwar said prices in the housing segment could increase in the near future with demand coming back, which helped the company sell units worth nearly Rs 500 crore in January.
“You may see little firmness of prices but it will be still 25-30 per cent lower than the peak levels of 2006-07,” Talwar said, adding that since 2006-07 housing prices have corrected by 40-45 per cent.
He, however, said if the government sanctions more projects and supply improves prices will remain stable.
In January, DLF sold dwelling units worth nearly Rs 500 crore against bookings for Rs 480 crore, he said.