Prestige Estates shares slump 5% on plans to raise capital via QIP

Prestige Estates shares dropped up to 5 per cent at Rs 1,837 per share on the NSE in Wednesday’s intraday trade. The stock prices slipped after the company on Tuesday said that it plans to raise capital through Qualified Institutional Placement (QIP), preferential issue, rights issue, private placement, or any other legally permissible means, aligning with regulatory requirements.

Additionally in the board meeting on 21 June, the company’s board will also discuss the potential monetization of assets within its hospitality segment through the issuance of shares. This initiative may utilise primary issuance, secondary issuance, or a combination of both.

According to reports, Prestige Estates is aiming for a valuation ranging from Rs 17,000 crore to Rs 20,000 crore for the initial public offering (IPO) of its hospitality business.

The real estate firm Prestige Estates functions across various segments, including residential, office, retail, hospitality, property management and warehouses with operations in over 12 major locations in India.

The company had reported a 70 per cent decline in consolidated net profit to Rs 140 crore for the quarter ending March 2024, compared to Rs 468.4 crore in the same period last year. The decrease in net profit was attributed to lower income during the quarter. Its total income for the quarter fell to Rs 2,232.5 crore from Rs 2,938 crore in January-March FY23.

For the fiscal year 2023-24, however, Prestige Estates' net profit increased to Rs 1,374.1 crore from Rs 941.8 crore in the previous fiscal year. Total income for the full year rose to Rs 9,425.3 crore from Rs 8,772 crore.

At 10:12 PM; the stock was trading 3.36 per cent higher at Rs 1870.15 per share on the NSE. In comparison, the NSE was down by 0.14 per cent. Presently the stock is trading at a price to earnings multiple of 47.96 times.