DLF plans to raise 100000 cr by next year

August 27, 2008	(1 votes, average: 5 out of 5)  Loading ...
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DLF Ltd is planning to raise Rs 10,000 crore over the next one year. The shareholders will pass an enabling resolution to this effect in the next annual general meeting which will be held on September 30. According to a DLF spokesperson, “This is a normal procedure to raise money. We need the shareholders approval to raise money. This process authorizes us to raise money upto Rs 10,000 crore.” The real estate company may not raise the absolute amount. It may raise funds for a smaller amount. The resolution is valid for one year, until the next AGM takes place.

With a size of Rs 84,909 crore DLF is the largest real estate company in India. In July this year DLF said it would buy back up to 2.2 crore shares at a maximum price of six hundred rupees per equity share. It has allocated one thousand one hundred crore rupees for the purpose, and would be financing the same through internal resources. The company is planning to buy the shares through open market purchases through the stock exchange route.

The buy back of shares will help increase the earning per share (EPS). This will also lead to a reduction in the price earning (PE) ratio. A lower PE always pushes up the stocks. High stock prices always work to a company’s advantage when it wants to raise funds. The buyback proposal follows a sharp dip in the company’s market value over the recent past, which saw its share price plunging to below the issue price of five hundred twenty five rupees, at which the company had sold shares to public about a year ago.

News Published Under:   Real Estate Developers |

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