DLF to raise up to Rs 1,888 cr via share sale on May 14

Real estate major DLF will raise up to Rs 1,888 crore through sale of 8.1 crore equity shares to institutional investors on May 14. The company has fixed a price band of Rs 222-233 per share for its share offer.

The issue of shares via institutional placement programme (IPP) is being done to meet the Securities and Exchange Board of India's (Sebi) guideline on minimum 25 per cent public shareholding by June 30 for private sector listed companies.

Promoters have a 78.58 per cent stake in the company as on March 31.

In a filing to the Bombay Stock Exchange on Saturday, DLF said "the Equity Issuance Committee of the Board of Directors... has finalised May 14, 2013 as the issue opening and closing date. Further, the floor price has been finalised at Rs 222 per equity share with price band of Rs 222 to Rs 233 per equity share."

Last month, DLF's shareholders approved the sale of fresh equity shares to meet the market regulator's public shareholding norms.

According to the red herring prospectus (RHP) filed with Sebi, DLF will issue up to 8,10,18,417 equity shares of face value of Rs 2 each through the IPP.

In the document, DLF said that it intends to use the net proceeds of the issue for reducing debt and working capital requirement among other purposes. The net debt stood at Rs 21,350 crore at the end of the 2012 calendar year.

It has appointed 8 bankers for the issue - Standard Chartered Securities (India), Deutsche Equities India, DSP Merrill Lynch, J.P. Morgan India, CLSA India, HSBC Securities and Capital Markets (India), Kotak Mahindra Capital Company, UBS Securities India.

This will be the third major fund raising exercise in the company.

DLF had launched its Initial Public Offer (IPO) to raise over Rs 9,000 crore in 2007, while the promoters had sold 9.9 per cent stake in 2009 to raise Rs 3,860 crore.

The realty major has been selling its non-core businesses since last couple of years to focus on core business and cut huge debt. It is targeting to pare net debt by half over the next three years to Rs 10,000-11,000 crore.

Last month, DLF had sold wind turbine projects in Tamil Nadu and Rajasthan for Rs 241 crore to two separate entities. Before that, the company had sold 150MW wind mill in Gujarat to Bharat Light and Power for Rs 282.30 crore in January 2012.

In August last year, DLF sold a 17-acre land in Mumbai to Lodha Developers for Rs 2,727 crore, while in December 2012, it announced sale of Amanresorts back to founder Adrian Zecha for about Rs 1,650 crore.

Share of DLF were trading marginally lower at Rs 234.40 on BSE in morning trade on Monday.