Realty major Lodha Developers, which plans to launch its maiden public issue soon, has recorded an over 16 per cent increase in sales bookings from India business at Rs 8,100 crore during the last fiscal and plans to make its housing vertical debt-free over the next few years. The company is launching its Initial Public Offer (IPO) to raise about Rs 5,500 crore. Earlier this month, it received market regulator Sebi’s go-ahead for the IPO. “Our sales bookings stood at Rs 8,100 crore during last fiscal,” Lodha Developers’ MD and CEO Abhishek Lodha told reporters here.
The company had achieved a sales bookings of Rs 6,950 crore during 2016-17. “We delivered 11,000 units in the last fiscal,” he said, adding that the company spent Rs 4,250 crore on construction during 2017-18. Lodha did not give any timeline for the launch of the IPO, although sources had earlier said the share sale could happen as early as this month, depending on the market conditions.
Asked about the company’s borrowings, Lodha said the total debt of India business is around Rs 18,000 crore. He said the company would reduce debt by about Rs 4,500 crore using the proceeds of the public issue. On further debt reduction plan, Lodha said: “The idea is the reduce debt and move towards a debt-free company in the development business.”
The company’s debt would be Rs 13,500 crore after the IPO and out of that about Rs 2,700 crore would be attributable to the commercial business and the housing segment accounting for the rest. Lodha, which has become the largest real estate player in the country in terms of sales bookings, is reviving its IPO plan after eight years.
The company had in April this year filed the draft red herring prospectus (DRHP) with the Sebi seeking approval to float an initial share-sale. Lodha’s IPO, if successful, would be the second biggest IPO in the real estate sector after DLF that raised close to Rs 9,200 crore in 2007. This would be the second attempt by Lodha Developers to launch a public issue and list its shares on the stock exchanges.
The company had filed its DRHP in September 2009 to raise about Rs 2,800 crore. It had received Sebi’s nod in January 2010, but later shelved the plan due to unfavourable market conditions post the global financial crisis. According to the latest DRHP filed by Lodha, the company will issue fresh shares worth up to Rs 3,750 crore.
The promoters will sell up to 1.8 crore shares through the Offer For Sale (OFS) route. Sources had earlier said the total proceeds are estimated at about Rs 5,500 crore through the fresh issue as well as OFS. The company is also considering a pre-IPO placement of up to 95 lakh equity shares for cash consideration aggregating up to Rs 750 crore, the document said.
The global coordinators of the IPO are Kotak Mahindra Capital, CLSA India, JM Financial and Morgan Stanley India. The privately-held Lodha Group, which was founded in 1995 by Mangal Prabhat Lodha, had completed projects with developable area of 50.49 million sq ft till December last year.
The company has 37 ongoing projects, of which 35 are in Mumbai region and Pune in India and two in London. These projects account for a developable area of 33.80 million sq ft, bulk of it in the Mumbai Metropolitan Region (MMR). The group had forayed into the London realty market in 2013 and acquired two prime sites in central London for an investment of about 400 million pounds. Lodha UK is eyeing a sales revenue of 1.5 billion pounds (over Rs 12,000 crore) from two ongoing housing projects in central London.