DLF revives mega IPO plan

Leading the real estate bandwagon in the primary market, DLF Ltd today revived the process of entering the capital market through its initial public offer...

Leading the real estate bandwagon in the primary market, DLF Ltd today revived the process of entering the capital market through its initial public offer, being touted as the country8217;s largest, to raise about Rs 10,000-13,600 crore. The company 8212; which was forced to withdraw its prospectus due to investor-related isues last year 8212; has filed a new prospectus with market regulator Sebi for its public offering that is expected by March this year.

DLF proposes to enter the capital market with a public issue of 17.5 crore equity shares of Rs 2 each through 100 per cent book building process, the company said in a statement. In August, it scrapped the initial public offering of as many as 21.9 crore shares. 8220;The company could raise more than or equal to Rs 10,000-13,600 crore depending on the price band,8221; market sources said, adding this would make the public issue India8217;s biggest, exceeding that of ONGC. The state-run oil firm had in 2004 raised Rs 10,500 crore through its offer.

DLF8217;s plan to enter the capital market comes close on the heels of successful IPOs of Parsvnath and Sobha Developers that received overwhelming subscription. Another realty firm Omaxe has filed the prospectus to raise up to Rs 1,400 crore. Indian real-estate developers are raising money from share sales to pay for new residential, retail and office space development. Parsvnath raised Rs 1090 crore selling 36.33 million shares at a price of Rs 300 each in an offer that closed on November 10.

Other companies such as New Delhi-based Unitech said in December it raised 707 million selling shares in a new property investment firm on London8217;s Alternative Investment Market. Hiranandani Constructions Pvt, K. Raheja Corp. and West Pioneer Properties Ltd are also turning to London8217;s AIM, where rules for selling shares are less stringent than other exchanges.

DLF had earlier withdrawn its prospectus from Sebi in August last year due to differences with minority shareholders regarding allotment of debentures. However, in November the company resolved the differences, which paved the way for the revival of its IPO plan. Minority shareholders had complained to Sebi alleging they did not receive the letter of offer for debentures issued by the company in December 2005.

The post-issue dilution of the proposed issue would be 10.1 per cent, the sources said.