DLF to sell 40% promoters' stake in arm by FY16

Debt increases by Rs 922 cr in the second quarter at Rs 22,520 cr

DLF on Wednesday said it would be able to sell stake in its rental arm — DLF Cyber City Developers  (DCCDL)— by selling 40 per cent of the promoter’s stake by the end of 2015-16. In a conference call with analysts, DLF senior executive director (finance) Saurabh Chawla said the process to divest the promoter’s stake had started. DLF would continue to hold 60 per cent stake in the DCCDL.

“We hope to sign the deal in this fiscal but fund will come in the next financial year," he said. The proposed transaction is aimed at removing the conflict of interest with promoters holding stakes in the parent company DLF and also in its subsidiary DCCDL. DLF has a rental income of about Rs 2,400 crore, of which DCCDL contributes Rs 2,200 crore.

This comes on the heels of Supreme Court refusing to stay DLF's plan of raising funds, which was challenged by Sebi in the Court.

DLF's CFO Ashok Tyagi also gave sales bookings guidance of around Rs 3,500 crore in the current fiscal. The company had achieved sales bookings of Rs 3,850 crore in the last fiscal.

And in the first half of current fiscal, DLF has achieved bookings of about Rs 1,610 crore.

In October, DLF's board decided that promoters will sell their 40 per cent stake in the DCCDL. The proposed deal is estimated to be valued at around Rs 12,000 crore. DLF would continue to hold 60 per cent stake in the DCCDL.

Promoters would reinvest a significant part of the amount realised from the proposed sale in DLF Ltd, which will be used to cut its high debt that increased by about Rs 922 crore in the second quarter and reached Rs 22,520 crore as on September 30.

Also, the company has not dropped plan to launch the Real Estate Investment Trusts (REITs). "We will create a large rental business platform in partnership with large, long term, institutional investors. This platform creation is precursor to REITs," Chawla said.