Three realty firms file DRHP; may raise Rs 10,000 cr

Developers spurred into market by bull run in stocks, series of successful QIPs.

Three real estate companies — Lodha Developers, Subrata Roy’s Sahara Prime City and Delhi-based Emaar MGF — each filed a draft red herring prospectus (DRHP) today with the capital markets regulator, Securities and Exchange Board of India (Sebi), to raise in all as much as Rs 10,000 crore from the primary markets, sources said.

While Lodha is expected to raise anywhere between Rs 2,500-3,000 crore from the initial public offer (IPO) of shares in the next three-four months, Sahara Prime City plans to raise up to Rs 3,450 crore in the next few months. Emaar MGF, which aborted its plans to raise Rs 7,000 crore early last year, plans to raise Rs 3,850 crore in the IPO by selling 11.50 million shares, sources said.

Last Friday, Delhi-based developer Ambience Ltd filed a DRHP with Sebi to raise as much as Rs 1,125 crore through an IPO, with a green shoe (over-allotment) option of Rs 168.75 crore. Godrej Properties, which earlier postponed its plans, is also planning to launch its Rs 500 crore IPO in the next three months, where it plans to sell 9.4 million shares to investors.

While Sahara will utilise what is raised from the IPO to develop townships in 99 cities, Lodha and Emaar are expected to use the proceeds towards their upcoming projects.

According to analysts, the recent bull run in stock markets and the series of qualified institutional placement (QIP) of shares by property developers has given confidence to private unlisted developers to enter the markets. The benchmark Sensex has risen 33.8 per cent in the past year and nearly 4 per cent in the past month, while the BSE Realty index, which tracks property stocks, has risen over 30 per cent in the past year and nearly 4 per cent in the past month.

A number of developers such as Unitech, DLF, HDIL and Indiabulls have raised Rs 10,000 crore through QIPs since the beginning of the year. According to estimates, IPOs worth Rs 40,000 crore are expected to hit the markets in the next six months. At least 14 real estate companies are waiting to tap markets with IPOs and QIPs in the next six months.

"The way QIPs have been sold, I do not have doubts about investor interest in IPOs. If companies are good and projects are bankable, they can easily raise funds from investors,'' said Ambar Maheshwari, director of investments at DTZ, an international property consultant.