Mumbai-based Lodha Developers has overtaken DLF, the country’s largest real estate player by market capitalisation, in terms of revenues for the first nine months of the previous financial year.
Lodha Developers posted revenues of Rs 66 billion, against DLF’s Rs 53.29 billion for nine months ended December 2017.
In the same period of 2016-17, Lodha’s revenue was Rs 55.72 billion versus DLF’s Rs 59.96 billion. Lodha was closing the gap with DLF in the fourth quarter, with revenues of Rs 79.26 billion, against Rs 82.21 billion of DLF.
The developer is looking to raise Rs 37.5 billion by issuing fresh equity capital through the IPO. The issue will also comprise secondary share sale by the promoters to the tune of Rs 13 billion to Rs 18 billion. According to sources, the offering will value Lodha Developers at around Rs 380 billion. Currently, DLF is valued at Rs 396 billion.
Lodha’s IPO will be the second-biggest real estate IPO in the country after DLF. In 2007, the Delhi-based developer had mopped up close to Rs 92 billion in its maiden offering.
Market players say the IPO of Lodha Developers will be a litmus test of investors’ appetite towards the sector.
As of December 2017, Lodha had 37 ongoing projects, of which 35 projects were in India and two were in London. These projects accounted for a developable area of 33.80 million square feet. Lodha also had 22 planned projects in India with a developable area of 64.21 million square feet.
According to its website, DLF has 235 million square feet of development potential with 11 million square feet of projects under construction.
A large portion of the fresh proceeds will be used towards retirement of debt. The company had a debt of Rs 180 billion as on January 31, 2018.
In comparison, DLF’s debt stood at Rs 123.8 billion in December 2017. The debt from commercial real estate business is reflected in DLF Cyber City Developers (DCCDL), the company’s joint venture firm with Singapore’s sovereign wealth fund GIC. The debt of DCCDL stood at Rs 165.61 billion at the end of third quarter of FY18. DLF’s gross debt stood at Rs 289.38 billion at the end of December 2018 quarter.