Sobha Developers to enter capital markets

Sobha Developers Limited, a Bangalore-based real estate developer, has filed its draft red herring prospectus with the Securities and Exchange Board of India (Sebi).

Sobha Developers has proposed to offer 9,476,800 equity shares of Rs 10 each, for cash at a premium to be decided through the book-built process. The issue will constitute 13 per cent of the fully-diluted post-issue paid-up capital of the company.

After filing the DRHP, Sobha Developers Limited chairman P N C Menon of said: "This is a historic moment for us at Sobha Developers and we look forward to the IPO as an event that will help us welcome new members into our family."

The company has reserved up to 947,680 equity shares to be offered to its eligible employees. Thus, the net offer to the public will stand around 8.53 million equity shares. Sobha Developers Limited is entering the capital market to raise funds to fund land acquisition, its ongoing and forthcoming projects and repay certain debts.

The decision by Sobha Developers to enter the capital markets is expected to give a fillip for a series of public issues from the other realty players as they bring in more transparency in the segment.

Sobha Developers has established its presence in the Bangalore market besides having a presence in the Western Indian markets. The company is also actively involved in building various campuses of Infosys.

The book running lead managers to the Issue are Kotak Mahindra Capital Company Limited and Enam Financial Consultants Private Limited. IL&FS Investsmart Limited is the co-book running lead manager.