Emaar MGF files new DRHP, cuts IPO size to Rs 1,600 cr

Realty major Emaar MGF today filed a revised application with market regulator Sebi for an IPO, but more than halved the issue size to Rs 1,600 crore.

Emaar MGF, which developed the Commonwealth Games village, did not specify any reason for cutting the IPO size, but sources in the know said that it was decided so considering the current funding requirement.

"The issue size has been lowered keeping in view the existing fund-requirements. The company has been able to reduce its debt significantly buoyed by healthy sales from its recent project launches and the improved realty market," a investment banking source said.

The company had a debt of Rs 5,808 crore as on August 31, 2009, as per the DRHP filed last year.

Emaar MGF, a joint venture between Dubai-based Emaar Properties and domestic firm MGF, was in news in the recent past due to cleanliness issue with the Games village. The company, however, maintained that it had handed over the village to DDA in June.

On September 29 last year, Emaar MGF had filed its draft red herring prospectus (DRHP) to raise Rs 3,850 crore through an IPO. In March, it even got the approval from Sebi to launch the public offer, but had withheld plans owing to weak market conditions.

This would be the third attempt for Emaar MGF to launch its IPO. In 2008, the company had hit the capital market to raise over Rs 7,000 crore through an IPO, but withdrew it due to poor market response.

Emaar MGF commenced its operations in the country in 2005. As per last year's DRHP, the company had a land bank of 11,340 acres till August 2009. It had 29 projects, comprising saleable area of 26.3 million sq ft, under various stages of development.