DLF plans to reduce debt via QIP of Rs. 3,000 crore

DLF plans to raise Rs. 3,000 crore by June by selling equity shares to qualified institutional investors (QIP). DLF is aiming to become a debt-free company. The company had announced plans to issue up to 17.3 crore shares via QIP to raise funds and pre-pay debt.

The proceeds from the QIP combined with an additional infusion of Rs. 2,500 crore from promoters against the issue of warrants would aid in the reduction of debt which stood at Rs.7,200 crore in December 2018. The company also intends to sell ready to move housing inventories worth Rs. 12,500 crore in the next 3-5 years.

DLF promoters K P Singh and family will pump in Rs. 2,250 crore into the company in addition to the Rs. 9,000 crore already infused by them. The company made a preferential allotment of compulsorily convertible debentures (CCDs) and warrants against the infusion of funds. This infusion, however, would cause the promoter shareholding to exceed the permissible limit of 75 per cent. The QIP will also allow the company to maintain minimum public shareholding of 25 per cent in the public company.

The promoters had sold their entire 40 per cent stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs. 11,900 crore and committed to invest this amount in the company to cut net debt.

On Monday DLF was trading at Rs.177 per share, 0.83 per cent on the BSE.