Real estate firms in India have started looking at qualified institutional placements (QIPs) again as a means to raise money to fund their expansion plans.
Brigade Enterprise Ltd, a Bangalore-based real estate firm, has plans to go for a QIP to lift as much as Rs750 crore, while Mumbai-based Orbit Corp. Ltd will try t a QIP along with an issue of non-convertible debentures to collect funds of Rs1,000 crore.
At least six real estate firms are expected to opt for QIPs to raise a total of Rs5, 000 crore during fiscal year 2010.
During fiscal year 2009, many Indian real estate firms including DLF Ltd, Unitech Ltd and Indiabulls Real Estate Ltd raised nearly Rs13,000 crore via QIPs.
Analyst Bhaskar Chakraborty at brokerage India Infoline Ltd said that they hadn’t experienced much improvement in investor appetite and real estate firms were keeping the QIPs option open while searching for other possibilities.
Commenting on the topic, Mr. Chakraborty said, “If companies go for a QIP now, there would be a feeling that they are in real trouble or else they wouldn’t dilute stake in the current situation.”
QIPs offer a comparatively quick process to raising funds via a private placement of shares or convertible securities with institutional investors. The other fund-raising options such as selling assets are slow as well as agonizing.
The realty index on Wednesday jumped 1.43 per cent to end at 3,208.83 points, while the Sensex gained 0.04 per cent to close at 17,755.94 points.
Analysts predict that QIPs will be fruit only towards the end of this fiscal year.
Brigade Enterprise Ltd, a Bangalore-based real estate firm, has plans to go for a QIP to lift as much as Rs750 crore, while Mumbai-based Orbit Corp. Ltd will try t a QIP along with an issue of non-convertible debentures to collect funds of Rs1,000 crore.
At least six real estate firms are expected to opt for QIPs to raise a total of Rs5, 000 crore during fiscal year 2010.
During fiscal year 2009, many Indian real estate firms including DLF Ltd, Unitech Ltd and Indiabulls Real Estate Ltd raised nearly Rs13,000 crore via QIPs.
Analyst Bhaskar Chakraborty at brokerage India Infoline Ltd said that they hadn’t experienced much improvement in investor appetite and real estate firms were keeping the QIPs option open while searching for other possibilities.
Commenting on the topic, Mr. Chakraborty said, “If companies go for a QIP now, there would be a feeling that they are in real trouble or else they wouldn’t dilute stake in the current situation.”
QIPs offer a comparatively quick process to raising funds via a private placement of shares or convertible securities with institutional investors. The other fund-raising options such as selling assets are slow as well as agonizing.
The realty index on Wednesday jumped 1.43 per cent to end at 3,208.83 points, while the Sensex gained 0.04 per cent to close at 17,755.94 points.
Analysts predict that QIPs will be fruit only towards the end of this fiscal year.
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