Mumbai/Bengaluru: Global investors that have submitted expressions of interest for acquiring a stake in realty firm DLF Ltd’s rental arm include both sovereign wealth funds such as Government of Singapore Investment Corp. Pte Ltd (GIC), Abu Dhabi Investment Authority (ADIA) and Canada Pension Plan Investment Board (CPPIB), and private equity firm Blackstone Group Lp.
“The lowest bid received is at over $2 billion. This is the first phase of bidding, which will be followed by one more phase of bidding, post which the final buyer will be decided. The process will take another 2-3 months to close,” said a person directly familiar with the transaction, who did not wish to be named.
The sale of 40% stake in DLF’s commercial property arm, DLF CyberCity Developers Ltd, by the promoters to institutional investors aims to raise about Rs.12,000 crore. The sale will see the creation of two verticals, a residential business with zero debt (DevCo) and a rental business from office and retail projects (RentCo).
Blackstone and CPPIB declined to comment.
Spokespersons at GIC and ADIA could not be immediately reached for comment.
In April, DLF sent out an information memorandum to potential global investors. Over the last few weeks, expressions of interest have been submitted and negotiations on term-sheets have started.
“The bankers have already been briefed and we are expecting a price of Rs.12,000-14,000 crore,” said a DLF executive, who didn’t wish to be named.
DLF’s net debt rose to Rs.22,202 crore in 2015-16 from Rs.20,965 crore the previous year. Of this, about Rs.14,200 crore of debt is on account of the rental business, and the rest is from DevCo or the residential development business.
On Wednesday, DLF shares ended at Rs.140.10 apiece on BSE, up 1.56% from their previous close, while India’s benchmark Sensex index fell 0.18% to close at 26765.65 points.