Sobha Developers rises on plans of raising funds

The company's stock is the largest gainer in the real estate sector.

It has appreciated by 75 per cent from Rs 111.15 to Rs 194.25 on reports that the company was going to raise funds through Qualified Institutional Placements (QIP) issue.

The board of directors of the company has called an Extraordinary General Meeting (EGM) on June 17, 2009.

The  Extraordinary General Meeting will consider the increase in the share capital of the company up to Rs 1,500 crore and the increase in the limit of investment by foreign institutional investors (FIIs) in the equity shares of the company up to 100 per cent of the equity share capital of the company.

The Bangalore-based real estate firm that engages primarily in the construction and development of contractual and residential projects, is looking to raise around Rs 1,000 crore via QIP issue.

The company has posted 53 per cent fall in net profit to Rs 107.80 crore (Rs 228.10 crore) for the financial year ended 31st March, 2009, while net sales have declined by 32 per cent to Rs 974 crore (Rs 1,431 crore) during the year.

The counter clocked combined volumes of four million shares in last week as against two million shares were traded in previous week.

The real estate sector has been facing a liquidity crunch for some time now but the situation has improved post the election results.

In fact, many industry players are encouraged by the response Indiabulls and Unitech have received. Indiabulls Real Estate has raised Rs 2,656.50 crore through QIP.

The company issued 14.36 crore equity shares at Rs 185 per share. Unitech had raised about Rs 1,615.25 crore through QIP. The promoter’s stake after the QIP has come down in both the cases.