Indiabulls Real Estate Ltd. said Wednesday it has raised around 26.56 billion rupees ($557 million) via a share sale to institutions, joining a growing list of Indian realty companies that are raising funds to reduce debt and boost liquidity.
Indiabulls, one of the country's biggest Property developers, issued about 143.59 million shares to institutions at 185 rupees each, the company said in a filing to the Bombay Stock Exchange.
Indiabulls, part of the diversified Indiabulls Group, didn't identify the investors and company executives didn't immediately respond to queries.
A person familiar with the matter said Tuesday the shares were sold to 49 institutional investors from India and overseas. Morgan Stanley was the sole bookrunner for the deal, the person said.
Higher borrowing costs and fears of job losses in a slowing economy have hit property sales in India, affecting cash flows of the realty companies. This has led several developers to raise capital via share issues, asset sales and also replacing their costlier debt with cheaper loans.
The companies are also introducing mid-priced residential projects and offering customized loan packages to lure customers.
"Most real estate companies across the region (India) had improvements in access to capital from January/February this year," Unmesh Sharma and Gautam Duggad, Mumbai-based analysts at Macquarie Research, said in a recent note. "Only now do Indian Property Developers appear to be experiencing better capital conditions."
Macquarie rates India's property sector overweight, citing improving liquidity for the property developers.
Founders of DLF Ltd., the country's biggest property developer by market value, raised 38.60 billion rupees on May 13 by selling a 9.9% stake to investors that included HSBC Holdings Inc. and Fidelity.
Unitech Ltd., the second-ranked realty company by market value, is also gearing up to raise additional long-term funds via a warrant issue to its founders as well as an issue of securities.
The company had raised 16.21 billion rupees in April by selling shares to institutional investors including HSBC Holdings PLC, Prudential PLC and Singapore's Orient Global.
Unitech plans to repay up to 17 billion rupeesc of debt in the current financial year that began April 1 through cash flows from sale of apartments and shopping malls, a senior company executive, who asked not to be named, said last week. Its debt is currently at about 80 billion rupees.
Shares of Indiabulls traded 5.1% higher at 210 rupees as of 0724 GMT on the Bombay Stock Exchange, compared with the benchmark index which was down 1.4%.
Shares of Indiabulls have gained 52% since January, outperforming a 46% rise in the BSE's realty index.
This post first appeared on IndianPropertySearch - Real Estate India, Resident, please read the originial post: here