Indian Realtors Raising More Money Overseas

December 27, 2006	(1 votes, average: 3 out of 5)  Loading ...
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Growing by leaps and bounds, the booming Indian real estate has now succeeded in raising more equity money overseas as compared to the domestic market in the year 2006. The amount has been estimated to cross a whopping USD two billion.

According to the data showcased by London Stock Exchange’s Alternative Investment Market (AIM), 11 Indian property developers has floated on AIM in the past two years to satisfy their insatiable appetite for the booming real estate. The total amount raised by them was $1.25 billion.

A majority of Indian companies listed on AIM are trading below their issue prices. The last trading price of Hicro Plc was 428 pence as opposed to its issue price which was 500 pence. Somewhat similar is the case with Unitech which is down to 93 pence against an issue price of 100 pence. Indeed, the trend is being followed by many other companies. However, there’s always an exception. Here, it is West pioneer, which last traded at 101 pence, while its issue price as 81.5 pence.

Some of the funds like Eredene and Saffron, which had raised the money on AIM last year, are similar to mutual funds. Both the conglomerates had raised capital to fund real estate projects in India. The fresh listings like Ishaan, Unitech and Hirco have identified projects for which they have raised the capital. If any company does not invest in the listed projects for some reason, the capital will be available to pump in elsewhere.

As marked by such an excellent response the AIM has received from Indian property developers, industry watchers see a continuance in popularity of this sub market of the LSE. Unlike other stock exchanges, AIM does not stipulate stringent rules and regulations thereby simplifying the process for the companies interested to float the money, says a source in the investment banking community. This is one of the reasons encouraging Indian companies to tap AIM.

Another facet in favor of AIM is the depth it offers. Two issues raised a total of $1.5 billion very close to each other. Contrary to this, a recent large issue - Cairn India - faced problems in getting fully subscribed.

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

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