DLF To Sell 50% In 4 Projects To PE Firms To Raise Rs. 3000 Cr

DLF To Sell 50% In 4 Projects To PE Firms To Raise Rs. 3000 Cr


DLF, India’s largest real estate firm to divest 50% stake in 4 of its new housing projects to Private Equity firms to raise over 3000 crore. Reports said that the company is expecting to close some of the deals by June and would further utilize the funds to augment the operating cash flow of their development arm DevCo which has been affected due to slowdown in housing demand. PE will considerably be the substitute for the cash flow which would have normally come from sales.

DLF Chief Financial officer (CFO) Ashok Tyagi has said, ”We are looking for private equity in 4 greenfield housing projects in Delhi-NCR and South India.” He further adds that the discussion with few private equity players have started but he has denied to disclose their names.

Commenting of 2-3 PE deals that are in a strong hope to get closed by June-end. “We are targeting to raise about 2500 crore from these 2-3 deals,” said Tyagi. When asked about the dilution of stake in each of the 4 housing projects, he said it would be around 50 percent.

DLF has classified its real estate business into two wings - DevCo, which comprises of all the residential projects and RentCo, which includes all the rental business from office and retail projects. DLF’s CFO disclosed that out of 20336 crore new debt, approx 6500 crore pertains to DevCo. The debt will continue to remain around this level in the short term as they will trim the debt as and when the sales will revamp. On RentCo’s debt, Tyagi commented that it would increase in the short term and eventually get reduced through launch of two real Estate Investment Trusts (REITs).

Earlier this month, DLF had reported 9 percent shrink in the united net profit at Rs 131.79 crore due to fall in sales and other income for the quarter ended December. However, its net profit stood at Rs 145.29 crore in the year-ago period.

For the third quarter of this fiscal, the income from operations declined by 5 percent to Rs 1956.72 crore from Rs 2058.42 crore in the corresponding period of the previous year. On the other hand, for the quarter ended December, the total income declined by 20 percent to Rs 2079.82 crore from Rs 2590.2 crore in the year-ago period. Furthermore, DLF has a land bank of about 295 million sqft, out of which 50 million sqft is under development.

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