DLF Ltd’s board will meet on Wednesday to consider issue of over eight crore fresh equity shares.
The meeting by the board of directors is being held to meet SEBI’s guidelines on minimum public shareholding.
Last year, SEBI had mandated companies to comply with minimum public shareholdings of 25 per cent by June 2013.
The capital market regulator had then said that the move would attract FII money and also improve corporate governance practices in the long term.
DLF said in a filing to the BSE, “A meeting of the board of directors of the company will be held on March 6, to consider offer of securities and all related actions thereto, subject to the approval of shareholders, for achieving the minimum public shareholding.”
EGM on April 4
The board shall also consider holding an extraordinary general meeting on April 4, to seek shareholders approval for the above purpose, it said.
DLF had earlier said during its analyst’s presentation that it would comply with minimum public shareholding. Promoters’ holding in DLF as of December quarter stands at 78.58 per cent.
Sources said the shares are likely to be offered through Institutional Placement Programme and the company will use the proceeds to trim its current debt of Rs 21,350 crore. A recent CLSA report, which raised the price target of DLF stock to Rs 280, said: “If it was not for the SEBI rule of 25 per cent minority shareholding, DLF would not consider an equity issuance. The equity issuance of eight crore shares is now likely in April.”
The report further added that the promoters’ Rs 1,600-face value CCPS (Compulsorily Convertible Preference Shares) at DCCDL (DLF’s subsidiary) level.
Eventually this will be converted into DLF stock.
This will raise the promoter holding in DLF again to more than 75 per cent requiring an equity issuance.
On Tuesday, the company’s stock closed 3.57 per cent higher at Rs 259.65 on the BSE.