MUMBAI May 30 Godrej Properties Ltd, the real estate unit of the Godrej group, has filed initial papers with the market regulator for an initial public offer of at least 6.99 million shares, the company said on Friday.
The group plans to raise up to 6 billion rupees through the IPO and a pre-IPO share placement to institutions, the bankers to the issue told Reuters. They hope to complete the offer by September this year.
The proceeds will be used for land acquisition, construction on existing projects and repayment of debt.
Godrej Properties will issue fresh shares through the IPO, making up 10 percent of its post-issue equity. Prior to the offer, it will also issue a maximum of 2.44 million new shares, or 3.5 percent of its equity, through the share placement, the bankers said.
Post-listing, the equity stake of Godrej Industries Ltd (GODI.BO) in the real estate unit will come down to 72 percent from just over 80 percent now, Chairman Adi Godrej had said earlier this week. The balance is held by the founders.
Godrej Properties is developing about 20 million sq ft space across Mumbai, Pune, Kolkata, Bangalore and Hyderabad. A third of this is in the residential segment, and the balance in commercial and retail.
ICICI Securities and Kotak Mahindra Capital are the book-running lead managers to the issue.
Real estate firms in India, which mopped up a third of all public offer funds in 2007, have stayed away from the primary market after Emaar MGF withdrew its $1.6-billion initial public offering in January.
A stock market slump and a squeeze on lending by banks has instead led to a spate of private equity deals in recent months. (Reporting by Prashant Mehra & Jasudha Kirpalani, Editing by Sunil Nair)