The Hindu Business Line : DLF files draft prospectus with SEBI

The countdown for what could be the country's largest ever IPO has begun with real estate major DLF Universal Ltd filing its Draft Red Herring Prospectus with the Securities and Exchange Board of India on Friday for raising an estimated Rs 13,600 crore.

"DLF Universal proposes to enter the capital markets with an initial public offering of 20.2 crore equity shares of Rs 2 each for cash at a premium to be decided through the 100 per cent book building process.

The issue comprises a fresh issue of 18.7 crore equity shares by the company and an offer for sale of 1.49 crore equity shares," a DLF statement said here.

Besides this, there will also be a greenshoe option of up to 1.7 crore equity shares. Thus, the total issue to public, if the greenshoe option was exercised, would aggregate 21.9 crore equity shares.

The Issue, without the green shoe option, shall constitute 11.90 per cent of the fully diluted post-issue capital. Assuming that the green shoe option is exercised, the issue would constitute 12.77 per cent of the fully diluted post-issue capital of the company.

Currently the promoters have about 99.5 per cent stake in the company, and would continue to retain substantial stake even after the mega IPO.

According to rough calculations, the indicative offer price could be in the ballpark range of Rs 700 per share, sources said.

"In the IPO, the company proposes to reserve 2,00,000 equity shares for allotment to employees. Of the balance, at least 60 per cent will be allotted to qualified institutional buyers, not less than 10 per cent is available for allocation to non-institutional investors and not less than 30 per cent is available for allocation to retail investors," the statement added.

When contacted, Mr Rajiv Singh, Vice-Chairman of the company, refused to comment on the price band. He said that both the buoyant stock market and the real estate market reflected the economy of India.

"In the real estate market, the valuations are being supported by the economic growth and the cities where the properties are located," Mr Singh said, adding that the industry was robust.

IPO in June/July

He said that the valuation process would be completed over the next 4-5 weeks and the IPO would be launched in late June or early July. The land bank of DLF had been pegged at Rs 80,000 crore by Cushman and Wakefield and Jones Lang La Salle, he said. "We have got approval for four SEZs in Amritsar, Ludiana, Ambala and Manesar and we may secure more in times to come," he pointed out.

Kotak Mahindra Capital Company and DSP Merrill Lynch are the Global Coordinators and Book Running Lead Managers, Goldman Sachs and HSBC are Advisors to the Issue. Book Running Lead Managers to the issue include Citigroup Global Markets India Pvt Ltd, Enam Financial Consultants Pvt Ltd, ICICI Securities Ltd, JM Morgan Stanley Pvt Ltd, and UBS Securities India Pvt Ltd. SBI Capital Markets Ltd is the Co-Book Running lead Manager.

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