Lodha Developers: Lodha Developers plans to raise Rs 2,500 crore with 10% dilution through IPO
For the proposed share sale, India’s largest real estate developer by residential sales has filed its draft red herring prospectus (DRHP) with the capital market regulator late Tuesday.
This is the third time the developer is proposing to take the company public with a share sale after attempting the same in 2009 and 2018 and later deferring the issue in the backdrop of unfavorable market conditions.
“The business is being valued at around Rs 25,000 crore and a primary raise with 10% dilution will help the company fetch around Rs 2,500 crore,” said one of the persons with direct knowledge of the development.
The company is planning to utilize the issue proceeds for partial repayment of debt and support growth.
Lodha has roped in JP Morgan, Axis Capital and Kotak Investment Banking as the lead bankers to the issue. ET’s email query sent to Lodha Group on Tuesday did not elicit any response.
The recent spike in housing demand, sales conversion and improved investors sentiment has prompted the developer to hit the market with its fundraising plan.
During the quarter ended December, Lodha reported over Rs. 2,500 crores of bookings led by both luxury and affordable housing projects. The group reported increased demand for its luxury and premium homes, clocking around Rs 1,000 crores of bookings, while its mid-income and affordable business witnessed Rs 1,500 crores of bookings during the period.
The company reported revenue worth Rs 12,440 crore in the financial year 2019-20 against Rs 11,910 crore a year ago, while its net debt eased to Rs 23,490 crore from Rs 25,120 crore.
Residential property market has witnessed a spike in sales in the last few months as market conditions remain favorable for homebuyers as interest rates and property prices are at multi-year lows.
Lodha is known for its ultra-luxury projects including the Trump Towers in Mumbai and 1 Grosvenor Square in London and also affordable integrated township Palava near Mumbai.
The government of Maharashtra’s decision to reduce stamp duty has also resulted in a rush among homebuyers to buy and conclude their transactions. In terms of its presence with projects and revenue potential Mumbai Metropolitan Region (MMR) is the most crucial property market for Lodha Group.
Recently, Moody’s Investors Service affirmed Macrotech Developers’ Caa1 corporate family rating (CFR) and Caa1 senior secured rating of Lodha Developers International’s US Dollar bonds guaranteed by Macrotech Developers. Moody’s has changed the outlook on the ratings to stable from negative.
The rating action followed Macrotech Developers’ repayment of the construction loan for Grosvenor Square (GSQ) — one of its London projects — through a combination of recent collection proceeds and a four-year inventory financing facility and earnings for the quarter ended September. Ends
