October 12, 2007

India's DLF To Raise $1.5B In Debt Abroad

India’s largest land developer by market value, said Thursday it is borrowing up to $1.5 billion overseas to fund expansion. In a statement to the Bombay Stock Exchange, DLF said its board had approved raising loans through a wholly-owned subsidiary abroad. It will spend $750 million to further business in India and $750 million to buy shares in an initial public offering of DLF Offices Trust in Singapore. New Delhi-based DLF raised $2.27 billion in June in the country’s largest IPO. Its stock has risen approximately 75% since then, amid soaring investor interest in the real estate sector, which is growing at 30% annually. On Thursday, DLF shares rose 2.7% to 918.75 rupees ($23.50) on the Bombay Stock Exchange. Earlier this month, the company said it is collaborating with Dubai-based land developer Limitless Holdings to build a $15 billion township on the outskirts of Bangalore (See: “ DLF Surges On Township Deal With Dubai”). The township will be the company’s largest, spread over 9,000 acres. DLF, controlled by billionaire Kushal Pal Singh, has around 615 million square feet of land under development, about half of it in Delhi and Mumbai. With the economy humming, a fivefold increase in office space is expected over next five years, plus about 20 million new housing units and 50,000 new hotel rooms. The government now permits 100% foreign direct investment in large residential townships, and the last few months have seen significant interest from foreign investors. In the last 18 months, they have pumped about $4.5 billion into the sector, according to industry estimates. Earlier this week, New York-based Trikona Capital, an India-specific real estate fund, said it plans to invest about $10 billion over 10 years in India. It plans to raise money by listing either on the Indian markets or an international exchange. In 2006, Trikona raised around $500 million by listing its fund Trinity Capital on the London Stock Exchange’s Alternative Investment Market. Source://forbes.com