DLF Promoter Group raises Rs 3860 crores through stake sale

In what was the largest equity transaction from the Indian real estate sector in India after DLF Ltd's ('DLF') own IPO, certain members of the promoter group of DLF today sold 168 million shares in DLF held by them in the open market for a gross consideration of approx. Rs 3,860 crores. This implies a gross realization of a price just above Rs 230 per share, representing a 2.6% discount to the closing price an May 12, one of the tightest achieved in recent times globally for transactions of this size.

The promoters propose to use the proceeds (net of costs, expenses and taxes, etc) from the transaction to infuse capital, directly or indirectly, into DLF Assets Pvt. Ltd ("DAL") by subscription of an appropriate instrument, or otherwise. The monies infused into DAL would be used by it to pay to DLF towards its contractual obligations.

The Promoters may also use part of the net proceeds towards the purchase of D. E. Shaw?s interest in DAL. The transaction saw a strong response with significant demand from most of the large existing institutional shareholders as well as several high quality new accounts using this opportunity to become core shareholders in DLF. This transaction will put investor concerns regarding DAL liquidity to rest, as well as reduce the net exposure to DAL in DLF's books.

The transaction also nearly doubles the free float of the Company from 11.4% to 21.3%, which will result in a corresponding increase in the Company's representation in various indices in due course. The Promoter Group continues to hold a 78.6% stake in DLF.

Commenting on the transaction and the response from large institutional investors, Mr. Rajiv Singh, Vice Chairman of DLF said "We are pleased to follow through our commitments with this game changing transaction for the Company and thank the investor community for their continued confidence in DLF." Deutsche Bank and J.P. Morgan executed the transaction for the Promoter Group.

Source : Equity Bulls

Keywords