Delhi-based realty company Omaxe is planning to raise up to Rs 1,500 crore in the current financial year for its various projects and promoters may dilute 5-10 per cent stake in the company via qualified institutional placement (QIP) in January-March, a person familiar with the development said.
"It (the funds) will be a mix of debt and equity. Depending upon market conditions, we could look at raising up to Rs 2,000 crore," the official said.
In the 2007-08 financial year, the company had raised around Rs 1,200 crore for its various projects. The company recently raised Rs 100 crore via private placement of 100 secured, non-convertible debentures of Rs one crore each to LIC Mutual Fund.
On stake dilution by promoters, he said, "The market conditions over the next two or three months are not likely to improve. Anyway, it may happen only in the fourth quarter (January-March)."
Currently, promoters hold nearly 90 per cent stake in the company.
"Depending upon market conditions, we may even look at diluting up to 15 per cent stake," he added.
Reacting to the news, shares of the Omaxe lost nearly 1.02 per cent to Rs 208.55 on the Bombay Stock Exchange on Tuesday.
Omaxe is also planning to dilute up to 50 Per cent stake in special purpose vehicles (SPV), which are executing the 19.5-acre residential-cum-commercial project at Visakhapatnam in Andhra Pradesh and the 393-acre integrated township at Naya Raipur in Chattisgarh.
"We are in talks with four- five private equity funds for these two projects and will raise (a total) of $50-$60 million (Rs 215-258 crore) by diluting stake," he said.
In 2007, Omaxe had formed a 50:50 joint venture with Israeli real estate company Azorim International Holdings for a residential project in Faridabad in Haryana.
Real estate developers are increasingly looking towards private equity players for raising funds on slowdown in demand, correction in realty prices across verticals and absence of any additional sources of funding.
"Developers are facing a liquidity crunch not just for residential projects but also for commercial projects," brokerage Citi said in its latest report on the Indian real estate sector. Omaxe's current debt to equity ratio is 1.50.
"Going forward, we intend to have it in the range of 1.00 to 1.50," he said. For the financial year 2007-08, the company posted a net profit of Rs 494 crore on revenues of Rs 2,307crore.
