The Hindu Business Line : DLF public issue targets up to Rs 9,625 cr

TAPPING NEW AREAS: (from left) Mr K.P. Singh, Chairman, DLF, with Mr Rajiv Singh, Vice-Chairman, and Mr T.C. Goyal, Director, at a press conference to announce the company's IPO in Mumbai Tuesday. Paul Noronha

Mumbai May 29 Realty major DLF Ltd is set to raise between Rs 8,750 crore and Rs 9,625 crore through its initial public offering of 1.75 crore equity shares. The price band has been fixed between Rs 500 and Rs 550 per share of face value of Rs 2.

The issue, through a 100 per-cent book building process, opens on June 11 and closes on June 14. The floor price of the band is 250 times the face value and the cap price 275 times. The issue will constitute 10.26 per cent of the fully diluted post-issue capital of the company. The shares will be listed on the NSE and the BSE. The company has not opted for grading of the issue.

Of the proceeds, the company proposes to utilise Rs 3,500 crore for land acquisition and development rights, Rs 3,493 crore for development and construction cost for existing projects and the remaining for loans' prepayment. Total loan outstanding for FY-07 amounts to Rs 9,932 crore against Rs 4,132 crore last year.

One lakh shares have been reserved for company employees. Sixty per cent of the net issue will be allocated on a proportionate basis to qualified institutional buyers, of which five per cent will be exclusively for mutual funds.

Further, not less than 10 per cent of the net issue will be available for non-institutional bidders. Not less than 30 per cent will be for allocation on a proportionate basis to retail individual investors.

Retail investors can bid on payment of Rs 150 per share of which Re 1 will be credited to face value and Rs 149 towards premium on application. The balance amount will be payable on due date. QIB bidders will have to pay 10 per cent of the bid amount and the balance before allotment.

Mr Rajiv Singh, Vice-Chairman of DLF, said the company had developed 224 million square feet (msf) of which 29 msf were residential, while retail, townships and commercial spaces spread across 3,000 acres in 31 cities.

For the year ended March 31, 2007, the company's net profit was Rs 414 crore against Rs 96 crore the year before. The jump in profit was primarily due to sale of some commercial spaces, said Mr Singh.

The company plans to enter the insurance market with Prudential Insurance of US as also wind energy.

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