Godrej Properties hits 7-week low; shares fall below QIP price of Rs 1,450

Shares of Godrej Properties (GPL) slipped 5 per cent to hit a seven-week low of Rs 1,273 on the BSE in Friday's intra-day trade, extending its decline to 17 per cent thus far in the month of March. The stock of Mumbai-based real estate developer was quoting lower for the sixth straight trading day. It has corrected 19 per cent from its 52-week high level of Rs 1,573 touched on March 1 and was currently trading at its lowest level since February 1.

With a continuous fall in the market price of the company, the stock is currently trading below its qualified institutional placement (QIP) price of Rs 1,450 per share. GPL on March 16 had announced that it has successfully raised Rs 3,750 crore through the QIP route.

The company said it saw a strong mix of investors with nearly 90 per cent of the book being allocated to long-only investors. GPL’s largest existing external shareholder, GIC, strongly backed the QIP with an investment of $110 million while the largest investment in the QIP was from a new investor, Invesco Developing Markets Fund and certain other funds managed by Invesco Advisers, Inc., who put in $150 million.

GPL has identified several growth opportunities and intends to use the net proceeds received from this issue for augmenting long-term capability building and scaling the business rapidly in the years to come, the company said.

GPL has a development portfolio with significant exposure to key markets of Ahmadabad, Bengaluru, Mumbai, Pune and NCR. Its land bank strategy includes both outright purchase of land and joint agreement with landowners in the form of revenue and profit share. Additionally, it also ties-up with developers as a ‘Development Manager’ entailing GPL to earn 10-11% of project revenues in lieu of marketing, selling and branding of the project.

At 02:33 pm, the stock was trading 3.5 per cent lower at Rs 1,298 as compared to a 1 per cent rise in the S&P BSE Sensex. A combined 1.9 million equity shares had changed hands on the counter on the NSE and BSE so far.