Real estate barons K P Singh and his son Rajiv Singh will likely dilute their stake in DLF Ltd, the country’s biggest realty firm by market value, by 9.9 per cent through market sales on Wednesday to raise up to Rs 3,800 crore ($760 million), reports Mint.
The people, who didn’t want to be identified, quoted in the report said the stake sale is likely to take place through an overnight book-building issue. Deutsche Bank AG is the joint book-runner along with JPMorgan Chase and Co., the people said.
The promoters’ stake in DLF is currently 88.5 per cent.
The proceeds of the stake sale are likely to be ploughed into DLF Assets Ltd, or DAL, an unlisted promoter company of K P Singh and family.
About $450 million of the proceeds will be used to buy out hedge fund DE Shaw and Co. from DAL, the people said.
It has been widely reported that DE Shaw wants to exit its investment in DAL. The people said DE Shaw was to exit DAL by the end of this month. The remaining proceeds of the stake sale could also be used to pay back DLF part of the money owed by DAL. As of 31 March, DAL owed DLF around Rs 4,900 crore.
DLF’s stock on Tuesday closed at Rs 236.25, up 3.55 per cent, on the Bombay Stock Exchange.
The benchmark index, the Sensex, rose 4.07 per cent and the BSE Realty Index, an index of 14 realty stocks, gained 3.77 per cent.
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