Unitech to raise $575 mn through QIP route

Within less than three months of raising $325 million through Qualified Institutional Placement (QIP), Unitech Ltd, the second largest real estate company in the country, is raising $575 million (Rs 2,770 crore) through the same route. The fund would be used to repay part of the company’s debt, which is currently at Rs 7,500 crore.

The company had got shareholders’ approval to issue 1 billion shares in the last Extraordinary General Meeting (EGM) held on June 16. On Friday, the company decided to issue 342 million shares at Rs 81 per share, which is the average of the last two weeks’ share price on the Indian stock exchange (in accordance to the Sebi guidelines). This is marginally lower than the last closing price of Rs 82.35 per share on June 26.

This would result in dilution of around 14 per cent equity stake in the expanded equity base of the company. After this, promoters’ stake in the company would come down to 44.7 per cent from the current level of 51 per cent. However, after the conversion of warrants, this would increase to 48 per cent.

Last week, the company had issued 274 million warrants to the promoters at Rs 50.75 aggregating to Rs 1,155 crore. The warrants would be convertible in 18 months.

Prior to this, Unitech had issued 421 million shares on April 22, 2009. After these two QIPs, the company’s equity base would increase to Rs 479.2 crore comprises of 2,396 million equity shares of Rs 2 each from Rs 324.58 crore on March 2009. This would further jump to 2671 million shares after the conversion of warrants allotted to the promoters.

The company has appointed four investment bankers — UBS, Morgan Stanley, Credit Swiss First Boston and IDFC-SSKI. The issue was opened on Friday and would close after the US stock market close as some of the investors in this round of QIP are listed on the US bourses, sources said.

Following the completion of these three round of fund raising exercise through equity route, the company would raise Rs 5,550 crore. As a result, its net worth would increase to Rs 8,500 crore.