Realty major DLF's net debt has increased by 1,021 crore in the second quarter of this fiscal to Rs 23,140 crore as housing sales remained sluggish.
According to an analyst presentation, the net debt of DLF -- the country's largest real estate firm -- increased to Rs 23,140 crore at the end of July-September quarter of 2016-17, from Rs 22,120 crore in the previous quarter.
In order to reduce debt significantly, DLF promoters are selling their 40 per cent stake in the company's rental arm DLF Cyber City Developers Ltd (DCCDL). DLF has the remaining 60 per cent stake in DCCDL, which holds the bulk of the commercial assets.
Promoters will be reinvesting a significant part of the amount realised from this deal into DLF for debt reduction.
Last week, DLF's Senior Executive Director (finance) Saurabh Chawla told analysts in a conference call that the company has received offers from two big investors that are interested in acquiring promoters' 40 per cent stake in DCCDL in a deal estimated at Rs 12,000-14,000 crore.
"The due diligence exercise has been completed. We have received two offers from marque investors. The bankers and legal advisors are evaluating and negotiating the offers as well as terms and conditions," Chawla said, without divulging the name of the two and the valuation offered by them.
DLF, which is negotiating the transaction on behalf of the promoters, expects to sign this deal in the next quarter, Chawla said, adding that the closure of transaction might spill into the next year for seeking regulatory approvals.
Last week, DLF reported a flat consolidated net profit at Rs 206.09 crore for the second quarter of this fiscal against Rs 206.18 crore in the year-ago period.
Income from operations rose by 1.46 per cent to Rs 2,070.67 crore in July-September, from Rs 2,040.84 crore in the corresponding three months of the previous year.
During the first half of 2016-17, DLF's net profit rose 41 per cent to Rs 467.51 crore, from Rs 332.05 crore a year ago.
Income from operations, however, fell to Rs 3,938.13 crore during April-September of this fiscal, from Rs 4,429.56 crore in the same period of the previous year.
DLF has a land bank of 269 million sq ft, of which 26.9 million sq ft of projects area was under construction at the end of the first half.
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