Brigade to raise Rs 400 cr debt

Bangalore-based real estate developer Brigade Enterprises is planning to raise around Rs 400 crore debt during present financial year to fund its future business growth. The company is in talks with financial institutions for raising this debt and is expected to close a deal in the near future.

“We will raise around Rs 300 crore-Rs 400 crore in the present financial year to fund our future business growth,” Shama Sunder, chief financial officer of Brigade Enterprises, said.

He also said that the company was in talks with banks to raise the amount and was expected to close a deal in the near future.

Post-rate hike by the Reserve Bank of India, fund flow from commercial banks have dried up due to drop in sales volume. Companies are also increasingly looking at raising funds through the equity route.

“Though the cost of borrowing is slightly up, we don’t have any plans to raise money through the PE route,” he said. Brigade Enterprises, which has a debt-equity ratio of 0.7 by March, 2011, will not see any change in this ratio despite the proposed debt raising by the company. “As repayment of our present debt is going on schedule, debt-equity ratio of the company will remain at the current level despite the proposed fund raising plans,” Sunder added.

Brigade Enterprises, which has a presence in residential, commercial and retail segment of the real estate industry, plans to launch around 9.2 million sq ft of new projects in Bangalore, Hyderabad, Chennai along with some of the tier-II cities of Karnataka like Mangalore and Mysore among others in the future.

Brigade Enterprises has posted a 2.5 times rise in its net profit to Rs 120.52 crore in the last financial year as compared with Rs 47.32 crore reported in the same period last year.

Net sales of the company rose by around 30 per cent to Rs 460.81 crore in FY11 as compared with Rs 354.85 crore reported an year earlier.

Operating profit of the company increased by 2.8 times to Rs 131.65 crore as compared with Rs 47 crore reported an year ago.