MUMBAI: Indiabulls Real Estate is learnt to have sold its $600 million qualified institutional placement (QIP) in the course of Tuesday, marking a success for the first equity issue aimed at riding the improved sentiment in the stock markets post the announcement of elections results on 16 May.
Banking sources familiar with the QIP said the country's third largest developer had received total applications worth $2 billion from private equity and hedge funds including Farallon, TPG Capital, Och Zoff, Moon Capital and Fidelity. It is also learnt that the company has placed the QIP at Rs 185 per share, slightly lower than the ruling market price of the stock. The Indiabulls stock closed at 199.75 on Tuesday. When contacted, Indiabulls CEO Gagan Banga said, "I can only say that the book has been closed. I would not be able to share the details of the issue at this point of time."
Indiabulls announced plans to raise funds through the QIP route on Monday and the issue opened on Tuesday. Morgan Stanley is the advisor to the issue. Indiabulls is expected to make a formal announcement later this week.
Domestic realty players have been battered by liquidity problems as well as shortage of demand. New projects have been put on the backburner for some time while many under construction are facing delays. This situation, industry experts say, may improve following the rise in market indices in the past two days. Last week India's largest listed developer, DLF raised $783 million through a share sale. DLF is also looking at selling some of its land parcels.
Another stressed reality major Unitech had raised $325 million through a QIP last month. It is believed these QIP proceeds will be used to bring down the company's debt of Rs 8,900 crore. Unitech sold shares through the issue at a 11% discount to the stock's last closing rate. However, market sentiments have dramatically improved since the Unitech issue.
Source:The Economic Times