Saturday, August 05, 2006
DLF defers pre-IPO share sale - sources
MUMBAI: Top property firm DLF Universal Ltd has put off plans to sell its shares to institutional investors before an initial public offer, two sources familiar with the development said on Thursday.
"There are some issues to be sorted out, so it is not happening now - at least for the time being," said one source.
DLF, which plans to develop special economic zones and hotels to tap into a new trend in India's booming property market, declined comment.
Investor appetite for IPOs had soured after a stock market slide in May sliced the value of new listings. Shares in low cost airline Deccan Aviation have nearly halved to 76.95 rupees from the IPO price of 148 rupees.
DLF had aimed to raise between $100 million and $500 million in a pre-IPO placement of shares, the sources said.
"It is already behind schedule, so probably we would skip the pre-IPO sale and go ahead with the IPO straight away and complete it in a few weeks," said the second source.
A stock market recovery, up about a quarter from a low in June, and a willingness by companies to price their IPOs attractively have helped woo big investors back.
Two IPOs that opened this week from construction firm GMR Infrastructure Ltd. and software services provider Tech Mahindra Ltd got full bids, but demand from small investors have been sharply lower compared to in February or March, bankers said.
GMR, which sold shares to funds at as high as 270 rupees a share, fixed a price band of 210-250 rupees for bids in the IPO.
IPO by October
DLF's IPO could hit the market in September, or October, sources said.
New Delhi-based DLF had filed an offer document with the regulator in May hoping to raise between $3-3.5 billion in an IPO in June. Bankers said those expectations have been scaled down.
The offering could still become India's biggest-ever, ahead of $1.17 billion raised by both software firm Tata Consultancy Services and state-run utility National Thermal Power Corp.
"We are still looking to raise about $2 billion," said the second source.
The New Delhi-based DLF planned to sell up to 12.8 per cent, or 219 million shares including an option for an additional 17 million.
"There are some issues to be sorted out, so it is not happening now - at least for the time being," said one source.
DLF, which plans to develop special economic zones and hotels to tap into a new trend in India's booming property market, declined comment.
Investor appetite for IPOs had soured after a stock market slide in May sliced the value of new listings. Shares in low cost airline Deccan Aviation have nearly halved to 76.95 rupees from the IPO price of 148 rupees.
DLF had aimed to raise between $100 million and $500 million in a pre-IPO placement of shares, the sources said.
"It is already behind schedule, so probably we would skip the pre-IPO sale and go ahead with the IPO straight away and complete it in a few weeks," said the second source.
A stock market recovery, up about a quarter from a low in June, and a willingness by companies to price their IPOs attractively have helped woo big investors back.
Two IPOs that opened this week from construction firm GMR Infrastructure Ltd. and software services provider Tech Mahindra Ltd got full bids, but demand from small investors have been sharply lower compared to in February or March, bankers said.
GMR, which sold shares to funds at as high as 270 rupees a share, fixed a price band of 210-250 rupees for bids in the IPO.
IPO by October
DLF's IPO could hit the market in September, or October, sources said.
New Delhi-based DLF had filed an offer document with the regulator in May hoping to raise between $3-3.5 billion in an IPO in June. Bankers said those expectations have been scaled down.
The offering could still become India's biggest-ever, ahead of $1.17 billion raised by both software firm Tata Consultancy Services and state-run utility National Thermal Power Corp.
"We are still looking to raise about $2 billion," said the second source.
The New Delhi-based DLF planned to sell up to 12.8 per cent, or 219 million shares including an option for an additional 17 million.
# posted by mashup @ 10:30 PM 
