MUMBAI: Realty developer Sunteck Realty has raised over Rs 650 crore from global financial institutions through Qualified Institutional Placement (QIP) and promoter’s capital infusion. The company is planning to use the money raised to support business growth through new land and projects acquisitions. While the developer has raised Rs 500 crore through placement of equity shares to institutional investors, the promoter group is pumping in over 150 crore capital in the company through a preferential issue.
The company has issued equity shares to institutional investors under the said QIP at Rs 322 per share. In a separate development, FMRC Fidelity Emerging Markets Fund bought over 7 lakh shares of the company on Monday at Rs 321.45 per share through a bulk deal in the open market.
The issue, which opened on Tuesday evening and concluded on Friday, attracted investors mainly from the US, Hong Kong and Singapore.
The recent policy reforms such as implementation of Real Estate (Regulation & Development) Act, 2016, are expected to improve transparency in the sector, increase the share of organised segment and enhance the overall investor sentiment. Rising institutional investor confidence and appetite for Indian real estate on the back of attractive asset valuations and a favourable regulatory environment is expected to push investments into the sector.
“With this new capital, the company will be able to put its ongoing and forthcoming projects on fast track. Additionally, the balance sheet has gained further strength and that would give us an edge to look at acquisition of distressed assets that are available in the market.
Despite right location and product offering, these projects are stuck due to liquidity issues,” Kamal Khetan, chairman and managing director, Sunteck Realty, told ET. With the advent of Real Estate Regulatory Act, several small realty developers are taking the route of development management agreements or joint ventures with large established developer to take their projects ahead.
Source: Economic Times