DLF's cuts debt to Rs 55.13 bn on fund infusion, targets zero debt by FY19

Realty major DLF's net debt has come down substantially to Rs 55.13 billion (Rs 5,513 crore) at the end of October-December quarter on fund infusion by promoters as it targets to become a zero-debt company by the end of next fiscal.

DLF, the country's largest real estate developer, repaid loans of Rs 71 billion (Rs 7,100 crore) using fund infused by the promoters.

According to an investor presentation, DLF's net debt stood at  Rs 55.13 billion (Rs 5,513 crore) as on December 31, 2017, and this is primarily from development business of housing projects.

The debt from commercial real estate business has now been reflected in DLF Cyber City Developers Ltd (DCCDL), the company's joint venture firm with Singapore's sovereign wealth fund GIC. The net debt of DCCDL stood at Rs 160.74 billion (Rs 16,074 crore) at the end of third quarter of this fiscal.

The JV holds the bulk of rent-yielding commercial assets of DLF group.

DLF's total debt stood at Rs 268 billion (Rs 26,800 crore) at June-end this financial year.

The promoters had in August last year sold entire 40 per cent stake in DCCDL for Rs 119 billion (Rs 11,900 crore). This deal included sale of 33.34 per cent stake in DCCDL to GIC for Rs 8,900 crore and buy-back of remaining shares worth Rs 30 billion (Rs 3,000 crore) by DCCDL.

This deal got concluded in late December. As a result, DLF's stake in DDCDL increased to 66.66 per cent stake from 60 per cent, while GIC has the balance 33.34 per cent stake in the joint venture firm.

Post this transaction, DLF promoters K P Singh and family have infused Rs 90 billion (Rs 9,000 crore) in the company and would pump in Rs 22.5 billion (Rs 2,250 crore) more over the next 18 months. DLF has made preferential allotment of compulsorily convertible debentures (CCDs) and warrants to the promoters against infusion of funds.

Yesterday, DLF reported a nearly 42-fold rise in its consolidated net profit at Rs 40.91 billion (Rs 4,091.27 crore) for the December 2017 quarter, driven by deemed gain from the GIC deal. Its net profit stood at Rs 98.14 crore in the year-ago period.

Total income, however, fell to Rs 18.55 billion (Rs 1,855.21 crore) in the third quarter of 2017-18 fiscal from Rs 21.77 billion (Rs 2,177.90 crore) in the corresponding period of the previous year.

DLF explained in a statement that its profit has gone up due to one-time exceptional gain on account of restatement of its investment in DCCDL at fair market value based on Indian accounting standards (IndAS 110), as DCCDL is now being accounted as a joint venture instead of a subsidiary.

DLF is currently developing 11 million sq ft of projects and it has a land bank of 235 million sq ft.

DLF shares were trading 0.66 per cent up at Rs 235.25 on BSE at 1220 hrs.