The Hindu Business Line : DLF defers IPO, to refile draft prospectus soon

DLF Universal Ltd on Thursday said it is withdrawing its draft public offer document with market regulator Securities and Exchange Board of India (SEBI) and will refile the draft prospectus for its proposed initial public offering after updating it with new business developments and latest financials.

Though the company did not give a timeframe as to when the document would be refiled, executives said they would "endeavour to do it in a month or so."

The company executives also confirmed that the parameters of the issue would "remain the same." In its initial draft prospectus with the SEBI in May, DLF had said it planned to sell 202 million shares, of which 187.1 million was to constitute new stock. It had also retained the option to sell an additional 17 million shares. Including the additional shares, the sale would have constituted a 12.77 per cent stake in the company. Based on the then market conditions, the issue size was estimated to be around Rs 13,600 crore.

Updating prospectus

On the withdrawal of the draft document, DLF said that it was done on the advice of its bankers. "The company has moved forward in its business plan. We have acquired land, new projects and new JVs have been signed. Hence we have found it prudent to update the red-herring prospectus and refile before we hit the market," Mr Ramesh Sanka, Group CFO of DLF, said.

The New Delhi-based company filed its offer document on May 12, a day after the Mumbai market hit a historic peak. Thereafter the company got embroiled in a controversy with minority shareholders, who filed a complaint with SEBI alleging that they did not receive the letter of offer of the debenture that the company issued in December last year.

SEBI had subsequently referred the matter to the Ministry of Company Affairs, which asked for responses from the company. "We have sent our responses to the Registrar of Companies," Mr Saurabh Chawla, Senior Vice-President, Finance, said. He, however, clarified that the refiling of the issue and the controversy over the minority shareholders' issue were "mutually exclusive".

Shareholders' Issue

On being asked whether the issue would be delayed once again if the minority shareholders' issue was not resolved, Mr Chawla said: "From our side, we have answered all queries. Let the issue be decided by the regulator." Once the clearances come through, the company would need three-four weeks for the IPO, he said. When asked on what the company would do if the IPO did not materialise, Mr Chawla said, "Through the IPO, we wanted a very conservative capital structure for the company... else instead of the equity route, we will take the debt route."

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