As real estate stocks continue to fall, some promoters are having a difficult time keeping pace with the loans they raised, with financial institutions (FIs) seeking more pledging against the amount.
Parsvnath Developers Ltd (PDL), the North India-based realty company promoted by Pradeep Jain, has seen a jump in the promoter’s pledging on a quarter-on-quarter basis. The promoters had a pledging of 77.85 per cent at the end of March and 86.47 per cent in the June quarter, a jump of 11 per cent. Repeated calls and messages to Jain did not elicit any response.
Its peer, Omaxe, promoted by Rohtas Goel, has also seen a jump in pledged shares. The promoters’ pledging has increased by 10.52 per cent in the first quarter as compared to the earlier one. The Goels have increased pledging to 67.82 per cent from 61.36 per cent as stock prices hit a 52-week low last week, when it touched Rs 119 per share.
Goel said, “The company has taken loans from non-banking financial companies (NBFC's) by pledging shares. We don’t foresee it going up because internal accruals have been good and we are also seeing some upsurge in demand in this quarter. The major portion of the share is pledged to IFCI for the purpose of corporate loans in Omaxe Ltd. It is to be entirely used for the realty business only. We expect to cut our debt to Rs 1,250 crore by the end of this financial year. On account of both repayment and new loans for new projects, we will be effectively repaying a net of Rs 200-250 crore in the next nine months.”
Unitech, the country's second largest realtor according to market capitalisation, has also seen a slight jump in pledging. Sanjay Chandra, managing director, is embroiled in the 2G telecom scam. Their pledging has increased from 68.06 per cent to 68.15 per cent. Unitech said it could not answer on promoters’ shares.
An analyst tracking the company said, “The share prices of all these developers have hit rock-bottom and financial institutions are asking for more cover. In fact, some developers have been trying to repay loans but the FIs are not releasing shares against it. Usually, the margin between the loan to pledged shares is two to three times, which has now increased to four to five times for some developers.” Omaxe shares closed at Rs 126.90 on the Bombay Stock Exchange, up 0.3 per cent; Parsvnath shares closed trading at Rs 46.5, up 0.1 per cent, and Unitech last traded at Rs 26.25, down 0.8 per cent.
The Ashok Piramal group’s Peninsula Land, headed by Rajeev Piramal, has increased pledging 5.95 per cent, to 13.35 per cent in June from 12.6 per cent in the earlier quarter. A market source says, “Peninsula has been actively trying to buy land in the suburbs of Mumbai, in the Thane area, and they have pledged some shares to raise money for that acquisition.”
| REAL PAINS | |||||||||
| Promoter Stake More From This Section | Pledge Shares as % of | 9-Aug-11 | |||||||
| Promoter Stake | Total Equity | ||||||||
| Company Name | 11-Jun | 11-Mar | 11-Jun | 11-Mar | 11-Jun | 11-Mar | Price in Rs | Mcap Rs Cr | % Chg over Prev |
| Unitech | 48.58 | 48.58 | 68.15 | 68.06 | 33.10 | 33.06 | 28.25 | 7391.05 | -0.70 |
| Omaxe | 89.14 | 89.14 | 67.82 | 61.36 | 60.46 | 54.70 | 124.80 | 2166.15 | -1.03 |
| Parsvnath Devl. | 68.21 | 67.66 | 86.47 | 77.85 | 58.97 | 52.67 | 44.20 | 1923.50 | -0.11 |
| Peninsula Land | 55.72 | 55.18 | 13.35 | 12.60 | 7.44 | 6.95 | 46.75 | 1851.77 | -4.88 |
| D B Realty | 61.65 | 62.77 | 65.05 | 65.73 | 40.10 | 41.26 | 68.30 | 1661.47 | -4.07 |
| Ackruti City | 82.49 | 82.49 | 71.77 | 75.47 | 59.20 | 62.25 | 179.70 | 1307.14 | -0.22 |
| Ajmera Realty | 62.47 | 62.47 | 1.12 | 1.13 | 0.70 | 0.70 | 120.55 | 427.71 | -1.07 |
| Ganesh Housing | 56.27 | 56.27 | 78.07 | 64.22 | 43.92 | 36.13 | 128.35 | 419.06 | 0.47 |
| Orbit Corpn. | 46.99 | 46.99 | 77.22 | 77.22 | 36.28 | 36.28 | 36.54 | 416.41 | -1.35 |
| Nitesh Estates | 43.67 | 42.48 | 29.20 | 25.81 | 12.75 | 10.96 | 19.10 | 278.54 | -5.45 |
| Data Source Capitaline Data Compiled by Bs Research Bureau | |||||||||
The only south-based company to feature in this list is Nitesh Estates, promoted by Nitesh Shetty, whose pledging has increased from 25.81 per cent to 29.20 per cent, a jump of 13.13 per cent. An email to the company was unanswered.
As for D B Realty, say sources, even after part-payment of the loan raised by the promoters, Shahid Balwa and Vinod Goenka, financial institutions have not released a bigger chunk of the shares. The promoter pledging has come down by a mere 1.05 per cent, whereas it had repaid close to half the loan, they said. It has repaid approximately 75 per cent of the debt on its books since January this year, which accounts for Rs 500-600 crore. The DB Realty management had acknowledged in a conference call earlier this month that the promoters had paid back Rs 538 crore of the Rs 800 crore they’d raised against their shares.