Mirae biggest buyer in DHFL issue

Dewan Housing Finance Company’s (DHFL) recently concluded Rs 225-crore qualified institutional placement (QIP) saw South Korea-based Mirae Assets pick up $8.5 million worth of equity, according to investment banking sources.

Foreign institutional investors (FIIs), including Mirae, accounted for more than 85 per cent of the issue which was split among more than 20 institutional investors. According to sources, the other big FII buyers included Asiabridge Fund, which subscribed to $5 million of equity shares, and Boyer Allan Investment Management.

Apart from the QIP issue, the company has also raised Rs 75 crore through a preferential shares issue to the promoter group.

As a result of the capital raising exercise, the promoter group’s stake stands diluted to 47.87 per cent from 55.86 per cent.

Kapil Wadhawan, vice-chairman and managing director, said the company proposed to utilise the funds to augment long-term resources and strengthen the company’s equity base for growth.

“This is pure growth capital for us. We are not looking to deleverage at all, because we are in a different class of business. It is unlike the realty as well as infrastructure space,” he said.

The latest round of capital raising would take the firm’s capital adequacy ratio beyond 25 per cent, Wadhawan added.

DHFL disbursed loans worth Rs 2,240 crore in 2008-09 and is aiming to grow its incremental loan disbursal to Rs 3,400 crore this year (2009-10). It currently relies on term loans from banks for 70 per cent of its borrowing needs.

The company is also preparing to raise debt up to Rs 1,000 crore through a non-convertible debenture (NCD) issue. The lead managers for the NCD issue are JM Financial, Enam Securities, ICICI Securities, AK Capital and Axis Bank.

Another plan to raise Rs 105 crore through a rights issue had been approved by the board but was put on hold in favour of the QIP issue, according to Wadhawan.