₹13,000CRORE CAPITAL BOOST BY NOVEMBER

BENGALURU: A stake sale by DLF Ltd’s promoters to an affiliate of Singapore’s sovereign wealth fund GIC Pte Ltd will see capital infusion of nearly ₹13,000 crore into India’s largest property developer, DLF said in an analyst presentation on Sunday.

The infusion, which will take place by November, will see the promoters putting in ₹10,000 crore (as net proceed post tax). The additional fund-raise, which DLF termed as a ‘public capital raise’ will probably be through a rights issue, said two analysts who didn’t wish to be named.

On Friday, DLF’s audit panel approved a transaction by which promoters will sell their stake in its rental arm DLF Cyber City Developers Ltd (DCDDL) to Reco Diamond, an affiliate of GIC Real Estate, Singapore, for a gross value of ₹11,900 crore. DLF has around ₹26,000 crore of debt.

DLF and GIC have entered into a strategic partnership to develop a rental assets portfolio, under the consolidated portfolio of DCCDL, the realty firm said, adding that “the partnership enables sustainable, long-term growth of DCCDL’s rental business and creates an optimum structure for its rental business to improve efficiency, with long-term capital for growth of the portfolio”.

The transaction implies an enterprise value of ₹35,617 crore for DLF Cyber City, translating into an equity value of around ₹30,200 crore. After the completion of the stake sale, DLF will hold 66.66% in DCCDL. Reco Diamond will own 33.34%.

“We expect this partnership to unlock significant embedded value in this portfolio and achieve scale and growth to unprecedented levels,” said Rajiv Singh, vice-chairman, DLF.