Realty firm Unitech is looking to raise about Rs 500 crore from private equity firms for the development of housing project in Noida and repay LIC's debt.
The company is in advance stage of discussion with 2-3 private equity firms, including one from the Middle East, to raise funds, sources said.
Unitech would use the amount raised to clear the dues of Life Insurance Corporation of India (LIC) and development of a new housing project in Noida, they added.
The company has recently raised Rs 85 crore from Piramal group, sources said.
Unitech had last year raised about Rs 70 crore from Piramal group to complete construction of its joint venture housing project in Chennai.
Unitech spokesperson declined to comment on this matter.
LIC has issued a notice to e-auction Unitech's 14 lakh sq metre land in Noida on May 6 if the realty firm does not repay the entire dues before that date.
Yesterday, the spokesperson said the company was in the process of making the outstanding payment to LIC shortly.
"We are close to finalising the funding for the same," the spokesperson said.
The company's consolidated net debt as of December 31, 2015 stood at Rs 6,802.05 crore with debt to equity ratio at 0.64.
Unitech's Managing Director Sanjay Chandra had in February said the company was making efforts on multiple fronts to improve the cash flow for completing its ongoing projects.
The company had made certain organisational changes to give sharper management focus to individual projects, Chandra had said.
Real estate sector is facing a huge demand slowdown from last 3-4 years, forcing developers to raise funds from PE players to meet construction cost and repay debt.
Private equity (PE) investments in the realty sector rose by 72 per cent to Rs 25,683 crore during 2015, highest since 2008, mainly on fund infusion in the sluggish housing segment, according to property consultant Cushman & Wakefield.