India Inc raises over Rs 150,000cr in 2009

NEW DELHI: Companies knocking on government doors for bailout funds may have been the norm in the West, but India Inc begged to differ from this
rule by raising over Rs 1,50,000 crore of capital for expansion from investors across the world in 2009.

Nearly two-thirds of these funds are estimated to have come from investors in overseas markets, which themselves were in shambles and where companies were in dire need of capital, forcing them to beg their respective governments for money.

Also, Indian companies took the quickfire QIPs to meet their immediate capital needs, instead of the time consuming IPO route. As a result, the funds raised by Indian companies during 2009 were more or less equal to the levels seen in 2008, when economic downturn was not a reality for most part of the year.

A total of about 50 companies raised a record-breaking cumulative figure of about Rs 55,000 crore through sale of shares to qualified institutional investors, mostly overseas private equity firms and also local and foreign financial services firms like banks, insurers and fund houses.

According to global consultancy firm Grant Thornton, private PE and QIP space saw 221 deals till December 13, totalling $11.17 billion (about Rs 52,000 crore). “The worst seems to be over for PE investing and clearly there is renewed PE interest in investing in the country, specifically in sectors supporting India’s domestic consumption like education, healthcare and real estate. As a result PE activity in 2010 is expected to rise significantly,” said S Krishna, executive director, PwC.

E&Y’s partner and national director Pankaj Dhandaria said: “PE investment activity is on the rise again as is evident from the deal activity, which has picked up in the past couple of months.”

Dhandaria added that India, which is on a growth trajectory and with its ability to generate relatively superior returns, would attract even higher degree of capital (including PE) in the years to come.

It was realty major Unitech which kicked off the QIP bandwagon earlier in the year and raised a total of close to Rs 4,500 crore in two separate deals. Other major QIP deals of the year included a consortium of foreign players putting in close to Rs 3,000 crore in Indiabulls Real Estate. Similar amounts were raised by Axis Bank and Hindalco, while a number of smaller fund-raising deals were also striked successfully.

The QIP performance of 2009 was even better that a total of little over Rs 20,000 crore — a record at that time — raised through this route during 2007, when markets and economy, both in India and abroad, were flying high.

The QIP funds raised were not even Rs 2,000 crore in 2008. It was the QIP-push that took India Inc’s fund raising spree in 2009 to the overall levels seen in the previous year, as capital raising activities turned tepid in 2009.

source – http://economictimes.indiatimes.com/news/economy/indicators/India-Inc-raises-over-Rs-150000cr-in-2009/articleshow/5364499.cms

DLF to Build Rs 15 cr Flat in Delhi’s Posh Locality

Real estate major DLF is coming up with Rs 15 crore flats in the posh Greater Kailash area, courtesy Municipal Corporation of Delhi (MCD), alleges Congress. Leader of Opposition in the Municipal Corporation of Delhi Jai Kishen Sharma has alleged that the civic body has “illegally” allotted the land meant for park and community centre to the DLF. The Bharatiya Janata Party is in power at the Town Hall. Claiming that the civic agency is hand in glove with the ruling party, Sharma said: “In clear violation of the MCD rules, plots measuring 1.5 and 2.5 acres have been allotted for building apartment complex. The land was meant for civic facilities like parks and community centre. This was done to increase the ground coverage of the housing society and give undue benefits to DLF.”

The real estate major is building eight and nine storey apartment buildings in the E and W blocks of the Greater Kailash-II. The building plans were sanctioned in 2007. DLF has already started construction on the plots. Captain KS Singh, a MCD councilor from south Delhi, said: “When the plots were allotted the topography of the area was very different from what it is today. Now, the area is densely populated. So, there should be no construction here as civic infrastructure will crumble if these housing projects come up.”

However, MCD officials refute the charges, saying the resolution for allowing the construction was passed by the Standing Committee way back in 1989. Some residents had also moved the Supreme Court on the issue, but the court ruled in favour of the MCD. The layout plan was sanctioned around two years ago. “I have asked the Commissioner to look into the matter and submit a report within three days,” Standing Committee chairman R K Singhal said.

source – http://www.indianrealtynews.com/real-estate-india/delhi/dlf-to-build-rs-15-cr-flat-in-delhi%E2%80%99s-posh-locality.html

Vatika looks to Raise Rs 125 cr from Real Estate Investment Firm Brahma Capital

Delhi based real estate and hospitality company Vatika Group, which raised Rs 1,000 crore from a group of international financial institutions such as Goldman Sachs, Baer Capital and Wachovia Bank in 2007, is in talks to get fresh funds from real estate investment firm Brahma Capital, a person familiar with the matter told ET.

When contacted, Pritam Chivukula, principal-real estate, Brahma Capital, said: “While we are active and looking at a couple of deals in the northern capital region, this is a mere speculation.” Although the exact deal size could not be ascertained, a senior executive in the private equity space said it is likely to be in the range of Rs 100-125 crore.

Vatika, which has interests in housing, hospitality, commercial complexes, IT parks etc, plans to use the fund to step up construction work in its up coming hotel project under the Westin brand on the Delhi-Jaipur expressway.

source – http://www.indianrealtynews.com/real-estate-india/delhi/vatika-looks-to-raise-rs-125-cr-from-real-estate-investment-firm-brahma-capital.html

Delhi The Real Hotspot In The Real Estate Industry

Delhi is the actual hotspot in the real estate business due to lots of reasons. There is an incessant and ever-growing demand for properties of various types in the national capital of India. Delhi properties have been showing a consistent appreciation and value addition for more than a few years, barring the recent downturn. The primary reason for Delhi being the real estate hotspot is its significance being the national capital. Hence, the host of Central Government Departments and it instrumentalities along with the employees manning the entities need space for offices as well as accommodation for their staffers. Further, the national capital is the most preferred educational centre with prestigious centres of learning such as the Indian Institute of Technology, Jawaharlal Nehru University, Delhi University, etc. This academic significance draws students and others to this centre. This also directly and indirectly contribute to turn Delhi into a real estate hotspot.

There are other reasons for the rising real estate market in Delhi. The city’s distinction does not lie in it being the national capital alone. Delhi is at the centre of a conurbation of commercial spots. The capital city and a cluster of satellite cities lying around it are collectively called the National Capital Region (NCR). The main satellite cities are Gurgaon, Noida, Ghaziabad and Faridabad. These satellite cities in themselves are industrial cities. Their close proximity to the national capital has all the more enhanced the commercial significance of Delhi which in turn keeps the property value going up incessantly. Further, in the new international economic equations, the Indian subcontinent is emerging as a major world market. In consequence, the caravan of multinational corporations entered the subcontinent to open shop. Invariably, the national capital emerged as a hot preference. This has also contributed to turn Delhi into a real estate hotspot.

There is phenomenal increase in real estate value at some of the commercially most significant spots in Delhi. For instance, Delhi’s Khan Market is really the real estate hotspot in the Delhi real estate industry. The place was in news recently as a particular spot in that locality marked the highest price for commercial property in the world. Recently, there was a sealing drive for illegal commercial properties in the capital. It was expected that it would adversely affect the real estate industry in Delhi. But it is going unaffected. In the residential property sector, in the most preferred residential locations in the South Delhi, prices are running astronomical.