EWDPL Plans to Float Rs 500-cr IPO by Year-End

August 13, 2009	(Be the first to rate this story!)  Loading ...
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Entertainment World Developers (EWDPL), a partner firm of Phoenix Mills, is planning to float a Rs 500-crore initial public offer (IPO) by the year-end, a top company official said. EDWPL is in the process of filing a draft red herring prospectus (DRHP) with capital markets regulator Securities and Exchange Board of India (Sebi) and finalising merchant bankers for the issue, the official said. After the issue, venture capital firm ICICI Venture is expected to convert convertible debentures it holds in the company and own a stake of around 15 per cent. The stake held by Phoenix Mills, promoted by Ruias, is expected to come down to 30 per cent from the 42 per cent it holds in the company. When contacted, Manish Kalani, managing director of EWDPL, said: “Yes, we are planning an IPO by the year-end and issue of fresh shares for our shareholders.”

The IPO plans of EWDPL, which builds malls in Tier II cities, closely follows that of other property developers like Godrej Properties and Lodha Developers, which are also planning to tap capital markets in the next three-four months to raise funds for their ventures. Godrej Properties, a part of the Godrej group, may float an IPO of around Rs 500 crore in the next three months and has already received Sebi’s nod for the same. Mumbai-based Lodha Developers is also looking at an IPO of Rs 2,000 crore by the year-end and plans to a file a DRHP soon. EWDPL is looking to deploy its IPO proceeds for its expansion into such cities as Madurai and Kolhapur, among others. “We will have five operational malls when we hit the markets,” Kalani said. Currently, the company has two malls in Indore in Madhya Pradesh and is expected to complete its projects in Raipur in Chhattisgarh, Ujjain in Madhya Pradesh and Nanded in Maharashtra. By 2011, EWDPL plans to have 13 operational malls in the country.

According to consultants, the success of qualified institutional placements (QIPs) of property developers in the recent past and the requirement for equity capital are prompting developers to go for IPOs. “The QIPs of real estate companies have been accepted very well by the market. Most of the real estate companies are in need of equity capital, as they are highly leveraged. They need to get equity capital to lower their leverage positions,” said Ambar Maheshwari, director, investments, DTZ — an international property consultant. Last year. EWDPL had raised nearly Rs 307 crore from a clutch of funds, including ICICI Venture and the US-based Pyramid group’s Nettleton Global. Various investors, such as Eredene Capital, Capitaland and MPC Synergy, have invested in the special purpose vehicles of EWDPL.

News Published Under:   Real Estate India, Real Estate Trends |

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