DLF draws plan to repay residential business debt

Reports say DLF promoters will infuse Rs 10,000 crore in the company through preferential allotment after they sell 40% in DLF Cyber City Developers

DLF, the country’s largest property developer, expects its development (residential) business debt to be completely repaid after the promoters infuse equity, said a source in the company.

There were reports that the promoters would infuse Rs 10,000 crore in the company through preferential allotment, after they sell 40 per cent  in DLF Cyber City Developers (DCCDL), expected to be done by September.

The source said its annual rental income at Rs 2,700 crore is enough to pay interest on loans on rental properties. According to the company’s FY16 presentation, DLF has net debt of Rs 4,500 crore in the development business and a gross debt of Rs 18,000 crore in the rental business.

However, analysts believe DLF has gross debt of Rs 11,000 crore in the development business and despite the preferential allotment, this would still have Rs 1,500-2,000 crore of debt, as the company could go for fresh loans.

“It remains to be seen how much they will make from selling stake in DCCDL,” said an analyst, who did not want to be named. The promoters are in talks with Blackstone, GIC, ADIA and QIA, among others, on a stake sale in DCCDL, sources said. The stock rose 7.8 per cent to close at Rs 143.95 on Wednesday.