To fund its ongoing projects, D S Kulkarni Developers Ltd is coming out with a follow-on public issue on April 25. The company requires Rs 439.44 crore to develop nine residential and commercial projects in Mumbai, Pune and Bangalore. | |
| The nine projects, comprising 39 lakh sq ft, were at various stages of construction and were expected to be completed by 2009, Sanjay Deshpande, joint managing director, D S Kulkakarni, said in a press conference. Of the total estimated cost of about Rs 555.23 crore for the project, the company had deployed Rs 115.79 crore till February 28, 2006. |
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| The company will issue 55 lakh equity shares of Rs 10 each to the public for cash at a price to be determined by the book-building process. It is part of the composite issue of 1.1 crore equity shares, comprising promoters' contribution of 6.4 lakh equity shares and a reservation of 1.1 lakh equity shares for employees, resulting in a net offer of 47.4 lakh equity shares to the public. |
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| According to the company's red herring prospectus, the construction cost is estimated to be about Rs 306.8 crore while the development and administrative cost would be Rs 36.7 crore and Rs 26.7 crore respectively. |
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| During 2006-07, the financial requirement of the projects will be Rs 209.6 crore. It will require Rs 141.8 crore for 2007-08 and Rs 46.2 crore for 2008-09. |
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| Among the listed risk factors that may have an adverse impact on the projects would be possible strikes, work stoppages or increased operating costs if the company is unable to negotiate with labour unions for acceptable terms. This is because the company operates in a labour-intensive industry and hires casual labour. |
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| D S Kulkarni Developers Ltd reported a net profit of Rs 11 .9 crore for the nine-month period ending December 31, 2005. It garnered a net profit of Rs 3.6 crore during the financial year 2004-05. The company was able to report rapid growth in profits due to the appreciation of property value over 20-30 per cent in the last one year. |
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| The total turnover of the company increased to Rs 66.4 crore for the nine-month period ending December 31, 2005 compared to Rs 53.6 crore for the entire year 2004-05. |
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| The issue closes on May 3, 2006. |
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