Pune realtors go the equity way

As Indian economy is recovering from the slowdown, real estate sales are picking up from few months, the biggies in Pune real estate sector are trying to promote their projects. Real estate business has faced tough time in last two years. As the market is recovering from slowdown, most of the developers are back in action. Despite the volatility in the market real estate developers in Pune are not changing their plans to mop up funds through public issues because some of then are ready to take the challenge and had already taken the preventive measures.

 According to reports, the demand for homes will increase by 20 per cent by end of 2010. The major proprietors have chosen the way to raise money from equity sales. The companies like Vascon Engineers, DS Kulkarni Developers and Kumar Urban Development Ltd (KUL) are in the equity sales league.   

 DS Kulkarni Developers, a 1500 crore group in Pune has announced that it has received its members’ approval to raise long-term funds through further issuance of securities including equity shares and instruments or securities convertible into equity shares of the Company for an amount not exceeding Rs 500 crore to eligible investors whether or not such investors are members of the Company or whether such investors are Indian or foreign, including qualified institutional buyers or as may be decided by the Board of Directors.  

D S Kulkarni, CMD, DSK Group said, "We are launching a new scheme over 250 acres in Pune targeting revenue of Rs 7000 crore. The equity sales is the stand by option for it. We are aware of market volatility and had already took the necessary precautions. We have another option of raising money through qualified institutional buyers (QIBs).  

Kumar Urban Development Ltd (KUL), formerly known as Kumar Builders who is ready to set IPO very soon. Revealing its IPO plan Lalit Kumar Jain, chairman of Kumar Builders said, " We are awaiting for the clearance from Sebi to launch IPO. We are planning to raise Rs 500 crore to boost our projects, land acquisitions, construction and for repaying some loans" KUL have 30 ongoing residential and commercial projects in the pipeline.

 When asked about the market volatility, Jain said, " We are waiting for Sebi nod. I know that market is very dynamic and volatile so, it is too early to comment on volatility of the market." 

  The company plans to raise a total of USD 800 million next fiscal by diluting stakes in various SPVs created to execute more than 30 residential and commercial projects across Mumbai, Pune  Bangalore Nagpur and Hyderabad.  

Having entered its silver jubilee year, engineering procurement and construction company Vascon Engineers too is going the IPO way.  The company intends to raise close to Rs 200 crore by getting listed. Partially to pay off debts amounting to Rs 39 crore and about Rs 115 crore for its real estate and EPC procurement business.

Explaining the objective behind going public, managing director R Vasudevan told Business Standard that raising money is not the focus. "The main purpose is not to raise money through this but to get better visibility and putting the company in a right perspective for the investors and the public."

Vascon having a multi-city presence in the country, plans to concentrate on developing nations like Africa et al as a part of its future expansion plan. With a developable potential of 55 million square feet, the company has a mix of residential and commercial projects lined up.