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Indiabulls Real Estate Seeking 23.2 Billion Rupees


Indiabulls Real Estate Seeking 23.2 Billion Rupees

Last updated: September 27 2007
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  • Indiabulls Real Estate Seeking 23.2 Billion Rupees

    Indiabulls Real Estate Ltd., India's third-biggest developer by assets, plans to raise 23.2 billion rupees ($585 million) from its founders to fund the building of shops and an electricity generation plant.

    The sale of 43 million warrants convertible into shares will boost the combined stake held by Chairman Sameer Gehlaut, 34, and four others to 37 percent from 27 percent over two years, Gagan Banga, a company spokesman, said in a phone interview from Mumbai. The company's stock rose as much as 14 percent.

    The plan is to use the money to set up wholesale shops across 30 tier-2 and tier-3 cities and set up a power plant for captive use at Nashik special economic zone.

    Gehlaut will invest as much as 10.8 billion rupees for 20 million warrants, while the group Chief Financial Officer Rajiv Rattan, 35, and director Saurabh Mittal, 35, plan to invest 5.4 billion rupees each for 10 million warrants, the company said in an e-mailed statement.

    Two joint managing directors Narendra Gehlaut, 35, and Vipul Bansal 34, will invest 1.08 billion rupees and 540 million rupees, respectively.

    The promoters' stake can rise up to a maximum 5 percent by the end of the first year and 10 percent by the end of the second year, Banga said. The warrants will be converted into shares at a price of 540 rupees a share, the company said. Mumbai-based Indiabulls will seek shareholders' approval for the plan.

    Shares of Indiabulls Real Estate, which have more than doubled in the past six months, rose 7.3 percent to 615.5 rupees at the 4:15 p.m. close on the Bombay Stock Exchange.

    Indiabulls Real Estate Ltd., carved out of Indiabulls Financial Services Ltd. in December, was listed on the Bombay Stock Exchange in March.

    The company is building offices, residential townships, and special economic zones that cover an area of 10,000 acres (4,047 hectares) of land, the company said on its Web site.

    The company has projects coming up in and around Mumbai, Gurgaon, adjacent to New Delhi, Nashik, Chennai, Goa, among others, it said.

    Indiabulls reported 195 million rupees net profit in the three months ended June 30, compared with 131 million in the year ended March 31.

    The company yesterday applied for licenses to offer telecommunications services across India, joining other construction companies including Unitech Ltd. and Parsvnath Developers Ltd. India allows foreign ownership of up to 74 percent in telecommunications services providers.

    Source: Bloomberg
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