DLF Limited, New Delhi-based real estate development firm, is entering the capital market with a public issue of 175,000,000 equity shares of Rs 2 each through 100 per cent book building process.
The price band of the issue, which opens on June 11, 2007, has been fixed at Rs 500 to Rs 550 per equity share. The floor price is 250 times the face value and cap price is 275 times. The issue constitutes 10.26 per cent of fully diluted post-issue capital of the company.
The share capital, as on March 31, 2007, stood at Rs 1,255.7 crore, reserves Rs 2,711.5 crore and the company’s net worth was Rs 3,976.4 crore.
Briefing reporters here on Tuesday, DLF Commercial Developers Limited Chairman A S Minocha said, the issue is to finance the expenditure for acquisition of land and development rights of Rs 3,500 crore. The issue is to finance construction and development costs of existing projects of Rs 3,493.4 crore and repay huge debt of Rs 9,932.8 crore (secured loans Rs 9,205.3 crore & unsecured loans Rs 727.5 crore) as on March 31, 2007. Of this, float rate loans constitute Rs 7.489.3 crore.
According to red herring prospectus, the increase in company’s revenues and profits before tax for fiscal 2007 were largely due to sale of commercial properties to promoter group company.
Revenues
For fiscal 2007, revenues were Rs 4,034.1 crore (Rs 1,242 crore in 2006) and profit before tax Rs 2, 549.5 crore (Rs 359.5 crore in 2006). The sales of properties constituted 55 per cent of total revenues and 61 per cent of total profit before tax.  The company’s debt-equity ratio as on March 31, 2007 stood at 2.5:1 and as of March 31, 2006 was 4.35:1.