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| Unitech: Placements to the rescue |
| Shobhana Subramanian / Mumbai Jul 01, 2009, 00:45 IST |
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Even the first placement of shares at Rs 38.50 a share to institutional investors in mid-April, which fetched it $325 million allayed cash flow concerns at Unitech. The Street was less worried about the huge equity dilution of 26 per cent on the pre-issue capital because the net debt-equity ratio will come off to a more reasonable 1.2 times by the end of 2009-10.
 With the second round of placements bringing it approximately $550 million, the debt–equity ratio, analysts expect could come down to a much lower 0.4 times. That puts the property firm on much firmer ground than it was six months back, when the debt on its books was close to Rs 9,000 crore.
The company’s March 2009 quarter revenues were down 69 per cent year-on-year though the fall in the profit after tax was less steep at 22 per cent, thanks to Rs 360 crore of other income. Operating profit margins slipped to 35.7 per cent compared with 50 per cent in the December 2008 quarter though adjusting for the consultancy business, they would have been far better at just over 40 per cent.
Unitech reportedly plans to launch 30 million square feet of space in 2009-10 across 15 cities with the focus being on affordable property; analysts believe sales could be in the region of 13-14 million sq feet. Over the last three months the company has launched several projects covering approximately 14 million sq feet of space, selling over three million sq feet. Revenues for the current year are expected to come in at around Rs 3,000 crore while net profits are expected to be around Rs 750 crore. However, with some amount of debt expected to be repaid with the funds raised, the profit numbers could be better.
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