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Delhi Based Developer Omaxe Looking to Raise Rs 800 crore via QIP
| January 14, 2010 |  (Be the first to rate this story!) Loading ... |
Omaxe Ltd, the New Delhi-based real estate developer, is looking to raise over Rs 800 crore by March end through qualified institutional placement (QIP) of shares. It plans to utilise the proceeds for debt repayment and acquisition of cheaper land. The company is looking to appoint a couple of investment bankers by the month end to facilitate the deal. However, the name of the investment bankers could not be immediately ascertained.
The developer is looking to use Rs 400 crore of the funds raised to reduce its outstanding debt of over Rs 1,500 crore, according to an official. The rest would be used to invest in its housing projects, which includes affordable mass housing ones. Omaxe would also invest in its proposed township of over 3,601 acres at Bulandshahar in Greater Noida. It is expecting sales of Rs 7,500 crore from this project.
The company spokesperson was not immediately available for comment. Omaxe had earlier said that it would raise up to Rs 1,800 crore through qualified institutional placement (QIP), but has now shortened the issue size as it wants to reduce debt by cash flows instead of promoter stake dilution.
Debt-ridden developers are increasingly finding it difficult to raise funds through QIP as their stocks have rallied significantly in the past six months and have absorbed all positive upside in them, according to an analyst covering the real estate sector. Recently, another New Delhi-based realtor Parsvnath Developers’ effort to raise $70 million through a QIP of shares failed as it was only able to raise $35 million due to poor investor response.
Also, Anant Raj Industries deferred its plans to raise Rs 2,000 crore through a QIP to fund new projects and expansion of existing projects. “It would be tough for Omaxe to raise Rs 800 crore by QIP, I think they would be able to raise between Rs 200 crore and Rs 300 crore if there is a good investor demand,” an analyst covering Omaxe said.
News Published Under: Real Estate India, Property Prices |
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