Bengaluru-based real estate developer Puravankara Limited is preparing to launch a qualified institutional placement (QIP) to raise between Rs 700-800 crore, according to sources familiar with the company’s plans.
Founded in 1975, Puravankara operates three major brands: Purva, Provident Housing, and Purva Land. As of March 31, 2024, the company has completed 86 residential and commercial projects, totaling approximately 50 million square feet. It also holds a land bank exceeding 36 million square feet and is currently developing over 23,000 homes covering more than 31 million square feet.
Recently, Puravankara entered the redevelopment market in Mumbai, securing rights for two housing societies spanning three acres, with an estimated gross development value of Rs 1,500 crore.
Puravankara has selected ICICI Securities as one of its advisors for the QIP and plans to appoint additional banks. The company is awaiting shareholder approval for its fundraising plans, which is expected within a few days. The deal launch is likely to occur next month, post-union budget.
The funds from the QIP will be used for both organic and inorganic growth opportunities, capital expenditures, and debt reduction. As of March 31, Puravankara’s net debt stood at Rs 2,151 crore, up from Rs 1,741 crore at the end of the previous quarter.
The company is also seeking shareholder approval to raise up to Rs 1,000 crore through a postal ballot, concluding on July 14. Puravankara did not respond to requests for comment.
If Puravankara proceeds with its QIP, it will be the fifth real estate company to tap into the stock markets for equity in 2024. Earlier this year, Mumbai-based developers led the way, with Lodha Group (Macrotech Developers Ltd) raising Rs 3,300 crore in March, D B Realty securing Rs 920 crore, and Rustomjee (Keystone Realtors Ltd) raising Rs 800 crore in May. Capacit’e Infraprojects also raised Rs 200 crore in January.
Most of these QIPs aim to raise growth capital and reduce debt, reflecting a shift from debt dependence to alternative capital sources. This trend underscores investor confidence in the real estate sector’s growth prospects.
According to PropTiger.com, sales and new supply grew by 8% and 11% year-on-year, respectively, across eight major cities, driven by strong markets in western India, particularly Pune, Mumbai, and Ahmedabad, which accounted for 61% of Q2 CY2023 activity.
In the first half of 2024, 37 companies raised Rs 32,527 crore through QIPs, compared to 45 companies raising Rs 52,349 crore in the entire year of 2023, based on data from Prime Database.
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By Proptechbuzz
By Ravi Kumar
