Oberoi Realty launches QIP to raise ₹1,200 crore

Mumbai: Real estate developer Oberoi Realty Ltd on Wednesday said it is raising capital from large investors through a qualified institutional placement (QIP), the company said in a filing to stock exchanges.

QIP is a capital-raising tool through which listed companies can sell shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into stocks, to a qualified institutional buyer.

Oberoi Realty is one of Mumbai’s largest real estate developers and has developed over 40 projects across the city, aggregating about 11.30 million sq. ft.

On Monday, Mint reported that Oberoi Realty had hired investment banks JM Financial and Morgan Stanley to manage its fundraising.

In a stock exchange filing, Oberoi Realty said that it has set a floor price of ₹509.29 per share for the QIP offering. On 5 June, at its annual general meeting, shareholders of Oberoi Realty approved a resolution to allow the company to raise as much as ₹2,000 crore through various routes, including a QIP.

According to a person aware of the company’s fundraising plans, Oberoi is looking to raise ₹1,200 crore through the share sale.

“Our company intends to use the net proceeds for various purposes, including but not limited to, (i) acquisition of land, land development rights or development rights by paying premium, fee or charges as required under applicable laws to the regulatory authorities; (ii) working capital requirements of the our Company; (iii) to invest in our subsidiaries, joint ventures and affiliates; (iv) capital expenditure; (v) repayment of debt; (vi) any cost incurred towards the objects of our company,” the company said in a filing with stock exchanges.

Oberoi Realty reported a revenue of ₹1,292 crore in 2017-18, compared to ₹1,161.35 crore a year ago.

It reported a profit of ₹458.8 crore in 2017-18, against a profit of ₹378.59 crore in the previous year.

The company is currently developing residential real estate projects with a total area of 13.65 million sq. ft, of which 5.6 million sq. ft has been sold till date, its filings show.

The residential projects being built by the company include Prisma, Sky City and Esquire in the western Mumbai suburbs of Andheri, Borivali and Goregaon, respectively. The company is also developing a residential and hotel project in upmarket locality of Worli in central Mumbai called Three Sixty West.

Few real estate companies have tapped the public markets in the recent years to raise capital, though activity is likely to be higher this year.

Last year, just two real estate developers—Brigade Enterprises Ltd and Sunteck Realty Ltd—raised capital through the QIP route.

The two companies collectively raised ₹1,150 crore from institutional investors.livemint