After an almost six-month lull, real estate developers like Oberoi Realty and Prestige Estates are planning to tap capital markets next month with Initial Public Offer (IPO) issues, according to media reports.
The exuberance in stock markets have prompted the developers, say bankers and analysts tracking realty companies. The last IPO in the real estate sector was in April this year, by Bangalore-based Nitesh Estates.
While Mumbai-based Oberoi Realty is planning to raise around Rs 1,100 crore through the IPO by diluting about 12 per cent, Bangalore-based Prestige is planning to raise Rs 1,200 crore and dilute higher equity in the public issue, said bankers involved.
At least a dozen real estate IPOs worth over Rs 12,000 crore are in the pipeline, with about half of theses, like those of Emaar MGF, BPTP, Lodha and Kumar Urban having already got the Sebi nod. There was also talk about some of these slashing the IPO size, but nothing has happened yet.
With most of these in the ‘wait and watch’ mode, given the earlier volatility in the markets, the success of Oberoi and Prestige could prompt others to hit the markets, said bankers. According to Vikas Oberoi, managing director, Oberoi Realty: “We have zero debt and good cash flows. We are confident of good response for our issue.”
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