NEW DELHI: India's largest real estate firm DLF has said that it has received Rs 1,992 crore from Singapore's sovereign wealth fund GIC after the completion of its deal to sell 50 per cent stake in two of its new projects in Delhi. DLF had earlier announced that it has signed an agreement with GIC to enter into a joint venture to invest in two upcoming projects located in central Delhi. The deal was later approved by the Competition Commission of India.
"DLF Ltd has now informed BSE that subsequent to receipt of CCI approval and having met other preclosing conditions, the funding for the above said transaction has been concluded on December 23, 2015 with the receipt of Rs 1,992 crore from GIC, Singapore's sovereign wealth fund," the company said in a filing to the Bombay Stock Exchange.
The two projects are located in the Moti Nagar area near central Delhi where DLF had bought two separate parcels of land from DCM Shriram Consolidated and Lohia Group in 2007. It had paid Rs 1,582 crore for the 38-acre property known as Swatantra Bharat Mills and DCM Silk Mills. DLF has so far built three phases of its residential project Capital Greens and a commercial tower on a part of this land.
DLF and GIC have agreed to set up two separate JVs for the plots of land and GIC has invested Rs 1,992 crore between the two JVs. These JVs are expected to benefit from GIC's experience of investing in integrated developments across the globe.
The developer has been grappling with a high level of debt and slowing sales in its key market of Gurgaon has not helped. It has been in talks with GIC and some other private equity players to sell stakes in a few of its residential projects in the National Capital Region to raise money for its development company.
DLF had reported a 21 per cent rise in its net profit to Rs 131.5 crore in the September quarter compared to a year ago. Revenues of the firm fell 7.33 per cent to Rs 1,865.49 crore during the quarter. DLF's net debt increased Rs 922 crore to Rs 22,520 crore as it invested in completing its existing projects and creating an inventory of completed assets that it intends to sell when the markets bounce back.
The developer is also in the process of selling 40 per cent of its promoter's stake in the company's rental arm to raise close to Rs 12,000-14,000 crore. The deal is expected to be signed by the end of the current financial year, though the money will take some more time to come in. Its promoters would reinvest a substantial amount of money from the stake sale in DLF Cyber City Developers back into the company after paying tax and other charges.
This would increase their stake in the company beyond the maximum 75 per cent that markets regulator Sebi allows promoters to hold in public companies. The company would simultaneously pare stake through either a QIP/preferential allotment or a rights issue to bring down promoter shareholding to 75 per cent, which would also bring in some more money.