The country’s largest real estate company DLF is planning to sale promoters share of its rental unit completely and to get free from debt till March 2019 after selling it to Sovereign Wealth Fund. There is a loan of about 13,000 Crore on DLF.
DLF Chief Financial Officer Saurabh Chawla said, “We have achieved a major achievement with the funding of promoters DLF as well as bringing a strategic partner. Our next target is to become a debt-free company till March 2019. We will use the funds from the promoters ‘fund, the amount collected from the QIP and the revenue from the inventory to achieve this.”
The promoters of DLF had raised about 9,000 Crore by selling their 33.34% stake in rental unit DLF CyberCity Developers Limited (DCCDL). And out of this, Rs 3,000 Crore has been used by the company to reduce the debt. DLF is planning to raise funds by selling 17.30 Crore equity shares through Qualified Institutional Placement (QIP) at the end of this year. This fund will also be used to reduce debt.
Along with this, the company will provide funds by selling part of the ready-to-move-in-residual inventory of more than Rs 15,000 Crore. Chawla said, “With debt free, there will be no pressure on us to repay the debt and we will also be able to reduce other regulatory risks. For this reason we have concluded to put up for sale only completed apartments in which the customers will be able to see what they are buying. We will operate our residential business in the same manner as we operate our commercial business.”
The company believes that there will be no dissimilarity between delivery time and promise. According to Chawla, “Demand will be high for ready apartments as in the reality market the ratio of under-construction inventory is very high. We have backing finance for construction from banks and owing to this we do not have to rely on the advance amount from buyers for construction.”
Due to the implementation of the Real Estate (Regulation and Development) Act, 2016 and Goods and Services Tax, DLF temporarily halted its sales. The company resumed the sales in November. DLF has received revenue of Rs 500 Crore from selling apartments in its luxury projects in the last two months. Chawla said that the market will continue to improve. However, he declined to disclose the company’s booking statistics and recent sales and.