Embassy Property to raise Rs 2,400 cr via IPO

Bangalore-based real estate developer Embassy Property Developments (EPD) today said it will raise Rs 2,400 crore through an initial public offer (IPO).

"The company filed the draft red herring prospectus with the market regulator SEBI in July this year, and is now awaiting a nod," EPD Managing Director Jitu Virwani told reporters.

We expect the IPO to hit the capital markets by this month end, he said.

"The IPO proceeds shall be used to finance the construction of ongoing projects, repayment of debt and shall be used for general corporate purposes," Virwani said.

"We shall use Rs 1,500 crore for financing the ongoing projects, Rs 430 crore for repayment of debt and Rs 470 for general corporate purposes," EPD General Manager Corporate Finance Sandeep Subramanya said.

The company has debt of Rs 1,500 crore, of which Rs 1,100 crore is linked with the rental income inflows from lease of commercial space in IT parks to niche software giants like IBM, Microsoft and others, he said.

EPD, with a land bank of 1,300 acre is developing four IT-SEZs in India. It has presence in Pune, Coimbatore, Cochin, Chennai and Corg in South Karnataka, besides projects in Malaysia and Serbia.

The company has forayed into residential housing segment. It plans to construct 5,000 units in Bangalore on a pilot project using expertise of its Malaysian counterpart.

The company turnover was at Rs 380 crore in February 2010 and it reported a loss of Rs 6 crore.