Godrej Properties raises Rs 6,000 cr via QIP for 'future development'

Realty firm Godrej Properties Ltd has raised Rs 6,000 crore by selling shares to institutional investors, including Singapore sovereign wealth firm GIC and SBI Pension, through qualified institutional placement (QIP) route as it looks to expand business amid strong demand for residential plots and apartments.

On November 27th, the company launched its QIP issue to raise up to Rs 6,000 crore. The company has raised this amount by diluting nearly 8 per cent of equity through the QIP issue, which was closed on Monday.

The QIP Placement Committee of the board approved the issue price of Rs 2,595 per equity share, which is at a discount of Rs 132.44 (4.86 per cent of the floor price) to the floor price of Rs 2,727.44 per equity share. It also approved the allocation of 2,31,21,387 equity shares to be allotted to eligible qualified institutional buyers.

In a regulatory filing on Tuesday, Godrej Properties informed that the QIP issue saw a strong demand of around 4 times the size of the QIP.

The issue also had a healthy mix of leading international and domestic investors including GIC, Blackrock, Aberdeen, Norges Bank, SBI Pension, and ICICI Prudential Life Insurance.

As a result of the QIP, Godrej Properties said its "net worth has increased by more than 50 per cent while the equity dilution was 7.68 per cent".

The company's gearing ratio will come down to below 0.2:1 from 0.7:1 as of September 30, 2024.

Commenting on the fundraise, Pirojsha Godrej, Executive Chairperson, Godrej Properties Ltd, said, "We greatly appreciate the confidence and support of the investment community and will do our best to ensure we utilize this capital wisely."  "This capital raise will allow Godrej Properties to significantly enhance its business development portfolio while maintaining a tremendously strong balance sheet. We remain focused on building scale through continued market share gains and margin expansion," he said.

Godrej Properties has reset its scale in recent years with bookings growth of 56 per cent in 2022-23 and 84 per cent in 2023-24, he said.

Pirojsha expressed confidence that the company was well positioned to deliver a 3rd consecutive year of rapid growth in booking value with 90 per cent growth in the sales bookings during the first half of this fiscal.

Godrej Properties is one of the leading developers in the country. It has a major presence in Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune and Bengaluru. It has entered into Hyderabad market recently.

In the last fiscal, the company's sale bookings jumped 84 per cent to a record Rs 22,527 crore, the highest among listed realty firms in 2023-24.

Godrej Properties has set a target of achieving Rs 27,000 crore worth of sale bookings for the 2024-25 fiscal.

During the April-September period of this fiscal, Godrej Properties' sale bookings value grew 89 per cent annually to over Rs 13,800 crore. This is the highest-ever booking value achieved by Godrej Properties during the first half of a fiscal year.

To expand its housing business, Godrej Properties acquires land through outright purchases as well as forms partnerships with landowners for joint development.

Godrej Properties has added 8 new land parcels in the first six months of this fiscal with a total estimated saleable area of about 11 million square feet and a total estimated booking value potential of around Rs 12,650 crore.